How Do Prenups Work?
07 August 2017
Prenups (Prenuptial Agreements) work by giving you and your fiancé(e) the opportunity to set out in writing what should happen to your financial assets, should your relationship break down.
It won’t be legally binding but Courts in England & Wales do take Prenups seriously, so if you do later get divorced, the Judge will take your Prenup into consideration.
You each need to make a list of all the financial assets you own, after which you need to decide who should receive what if you divorce, and in what proportion. For example, you might decide to split the matrimonial home 50/50, but keep all of the inheritance you received from your grandmother for yourself.
In England & Wales Prenups work by allowing you to ring-fence certain assets that you want to keep out of a future divorce settlement.
Once you’ve made these decisions, you need to ask a Family Law Solicitor to set them out in a Prenuptial Agreement. You each need to take independent legal advice to ensure you both understand how Prenups work, you understand the implications of signing the agreement you have reached, and you have not been unduly influenced.
When it’s been signed, your Prenup is officially in place.
If, during the course of your marriage, you change your mind about any aspects contained in the Prenup, you can always have it amended. This is called a Post-nuptial Agreement.
Do Prenups work?
A Prenup is made before your wedding day. It might seem strange to look ahead to a potential divorce situation when you’re not even married yet. But a Prenup clarifies the position at the outset, helping to prevent the disputes that so often arise when a couple divorce.
Without a Prenup, a divorcing couple must negotiate how to split their assets. This will be done when the relationship has broken down and emotions are running high, which makes reaching a fair and reasonable agreement all the more difficult.
If a decision as to how to split assets cannot be reached, a divorcing couple will need to go to Court where a Judge will decide on their behalf. This can be both expensive and stressful.
In our experience, if a couple has a Prenup in place, they’re much more likely to adhere to the terms of the agreement. This means it won’t be necessary to involve the Courts, making the process quicker and less stressful for those involved.
Even if there is a dispute which ends up in Court, a Prenup will carry some weight. The Judge will consider the fact that you each signed a Prenup, and as long as your needs (and those of your children) are provided for, may well uphold the Prenuptial Agreement.
However, the Court will apply a test when deciding whether to implement a Prenup, which ensures that:
- Both parties have taken independent legal advice
- The Order fair and reasonable
For more information see Will a Prenup Stand Up in Court?