The advantages and disadvantages of a prenuptial agreement
- Family Law
We all know that prenups (prenuptial agreements) are unromantic. The thought of entering into one when you are trying to agree your seating plan or pick out your floral arrangements, is a pretty dismal prospect. Some couples are able to take the emotion out of it, and require a document setting out how their finances are to be resolved should they divorce. According to a survey conducted by YouGov, Generation 'Z' (those born from 1996 onwards) are more likely to consider a prenup.
If you are considering entering into a prenup, or if your partner has mentioned that this is something you need to do, the following advantages and disadvantages should help with the decision making.
Five advantages of a prenuptial agreement
- You can make it clear, and agree at the outset, as to whether a particular asset is yours alone, or whether you are happy for it to be shared on any future divorce. This provides certainty and avoids lengthy and costly litigation in the future, which in turn saves you in legal fees.
- You will provide each other with financial disclosure of your assets before any agreement is reached, allowing you to agree to protect any assets, such as gifts or property received before the marriage. You can also protect your assets from any of your partner’s debts now or in the future.
- Entering into an agreement should lead to fewer arguments about your finances and will help you communicate about financial matters during the marriage.
- A prenup will protect any assets ring-fenced for your children, and will set out what will happen to your assets on your death, ensuring that your children are taken care of.
- If you are concerned that your partner wishes to marry you for your money, the prenup should help to put your mind at rest.
Five disadvantages of a prenuptial agreement
- Prenups are not legally binding, however, following the Supreme Court decision in Radmacher v Granatino  UKSC 42 , the court will uphold a prenup entered into freely by both parties, unless it would be unfair to do so.
- The prenup cannot anticipate what will happen in the future. If there is a significant change of circumstances, it is unlikely that the prenup will be upheld by the family court. In an attempt to ensure that the prenup is upheld by the court, the document should be reviewed on a significant change of circumstances, resulting in further legal fees and potential upset, and putting a strain on your relationship.
- The court is unlikely to uphold a prenup that is no longer in the best interests of any children of the marriage. Any agreement reached will be dependent on the circumstances of the children at the time of the divorce.
- Sometimes the financially weaker party will agree to terms limiting their rights, such as their inheritance, just to make sure that the wedding takes place and the marriage goes ahead. It is important to ensure that both parties understand the implications of the clauses in the agreement, and that you take legal advice from a family lawyer.
- It is unromantic and stressful, and needs to be completed 28 days before the wedding. You will both need to take legal advice, increasing legal costs and taking time away from planning your wedding.