Prenuptial agreements (or ‘prenup’) in the UK is a legal document drawn up between a couple before their marriage to outline how each of their assets will be divided between them in the event of a divorce.
Assets including property, debts and income are usually covered in a typical prenuptial agreement to help couples avoid any financial surprises if the relationship were to break down in the future.
Prenuptial agreements are more likely to be put in place when one partner already has or is likely to acquire, more assets than the other. For example, those with a large inheritance, landowners, business owners or couples who are marrying in later life or who may be entering into a second marriage.
What are the benefits of a Prenuptial Agreement?
To pass separate property to children from prior marriages.
A married couple with children from prior marriages may use a prenup to spell out what will happen to their property when they die so that they can pass on separate property to their children and still provide for each other, if necessary. Without a prenup, a surviving spouse might have the right to claim a large portion of the other spouse’s property, leaving much less for the kids.
Clarify financial rights.
Couples with or without children, wealthy or not, may simply want to clarify their financial rights and responsibilities during marriage.
Avoid arguments in case of divorce.
Some may want to avoid potential arguments if they ever divorce, by specifying in advance how their property will be divided, and whether or not either spouse will receive alimony. (A few states won’t allow a spouse to give up the right to alimony, however, and, in most others, a waiver of alimony will be scrutinized heavily and won’t be enforced if the spouse who is giving up alimony didn’t have a lawyer.)
Gaining protection from existing debts.
Prenups can also be used to protect spouses from each other’s debts, and they may address a multitude of other issues as well.
What should be included in a prenuptial agreement?
Prenuptial agreements are put in place to protect a range of assets and are completely tailored to your and your partner’s needs.
Usually, they will contain an inventory of each of your assets and details on how you both wish for them to be looked after during your marriage and how they will be split should your relationship break down. If there are any assets you would prefer not to be divided or split between you and your partner if you decide to divorce in the future, these should be included in your prenuptial agreement.
Prenuptial agreements (or ‘prenup’) clauses usually include:
- Property held in your sole name or joint names
- Savings held in bank accounts
- Premium bonds
- Inheritance
- Stocks and shares
- Pension pots
- Income
- Business interests