Romantic or a pragmatist, which are you? No subject seems to divide these groups as much as the idea of nuptial agreements.
"I’ve built up wealth before marriage and want to protect that"; "I want to protect my children from a former relationship"; "I’m due to receive family inheritance and my parents want that protected that in the event of divorce"; "I just want to plan my financial future so we both know where we stand, should the worst happen". These are four commonly heard sentiments in our office. People want to plan their futures as best they can.
There are three options; cohabitation agreements for the non-married, pre-nuptial agreements before marriage and post-nuptial agreements for those who have already walked down the aisle.
Hopefully these agreements will be relegated to the bottom of a drawer, never to see the light of day again.
If, however, if there is a permanent separation then these documents will help provide certainty for your finances (rather than needing to negotiate whilst feeling emotionally drained by a separation) and can save a significant amount of future legal spending.
Clients who have walked down the aisle say to us:
"We married recently and didn’t get round to drawing up a pre-nuptial agreement."
"We’re already married and there has been an unexpected change in our circumstances."
"My spouse and I have hit a rocky patch; I want to work on the marriage but also have planned for if it doesn’t work out."
"My family wants to gift us money but only if it’s protected if we divorce."
It is not too late to enter into a nuptial agreement; once married you can enter into a post nuptial agreement.
In England and Wales pre and post-nuptial agreements are not automatically legally binding but are highly likely to be upheld provided the terms are broadly fair and provided safeguards are upheld. They are the best way to financial plan in the event that a relationship ends.
What if you live together without marrying?
The idea of a "common law spouse" is a myth – either you have walked down the aisle or you have not – and if you do not intend to marry you can draw up a cohabitation agreement to protect your finances.
This defines how any direct or indirect financial contribution to your property will be treated when made by your partner and sets out what share (if any) they would receive in the event of a relationship breakdown.
Without a cohabitation agreement, there are risks that the partner may make a claim for an interest in the property into which he or she has moved without making any contribution.
A document recording what will happen helps to preserve the interest of the owner and lessens the unnecessary stress, cost and uncertainty of post-separation court proceedings.
Such arrangements are excellent, wealth preservation/planning tools with no adverse tax consequences. They can aid those giving a helping hand to family getting on the property ladder.
It is worth considering these arrangements as early as possibly in your relationship, especially with pre-nuptial agreements, so they can be drawn up and finalised well before the wedding and then you can then concentrate on the order of service, catering and flowers.
David Lister and Joanna Kay are from Rayden Solicitors.
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