Prenup Agreements: What you need to know
Although prenuptial agreements (also known as ‘prenups’) have a reputation of being reserved for the wealthiest among us, they can be valuable when entering a marriage or civil partnership. Here are some things to consider.
What does a prenup agreement cover?
A prenup is a written contract that a couple agrees to before marrying or entering a civil partnership. It sets out what legally belongs to each person upon entering this new chapter and can help distribute wealth if it ends in divorce.
A common misconception is that prenups are only used by wealthy individuals, when in fact, anyone can secure a prenup to protect someone’s rightful wealth.
A prenup tends to cover the following:
- Money
- Assets
- Property
A prenup can be helpful to set out rightful wealth and assets, from inheritance to businesses. It can also establish whether debt belongs to a particular person and whether any children from a previous relationship have a right to certain assets, though this will also require you to create a Will.
Reasons you might get a prenup
Prenups offer a form of wealth protection, so it’s understandable for people to consider one before entering a marriage or civil partnership.
They can offer peace of mind if there is more wealth on one side of the partnership, meaning there’s more to protect. Someone might run a business they’d like to protect if the marriage breaks down, or someone may receive or be owed a large inheritance. There could also be significant debt that the other partner doesn’t want to become responsible for.
While no one wants to imagine the idea of divorce, the truth is that prenups can protect a person’s rightful assets. They can also be used to outline custody arrangements of your children.
Pros and cons of a prenup agreement
Prenups are not legally binding, however they are being given serious consideration by family courts when assessing a couple’s finances. Prenups are more likely to stand up in court if they have been drafted by a legal expert, which is why people work with reputable family law solicitors to ease the process. Drafting a prenup involves navigating legal complexities and can cause emotional strain in some cases, which is why it’s so important to seek help from an expert.
It’s understandable to view prenups as a pessimistic step before entering a marriage and some might even experience a lack of trust off the back of it. However, it is important to explain the reasons behind it, touching on the fact that this is a form of wealth protection and has nothing to do with how a person feels about their partner. Having financial discussions can foster a healthier relationship going forward. Interestingly, statistics show that younger people are more likely to consider a prenup.
If you need assistance with drafting a prenuptial agreement, it’s best to get in touch with legal professionals to begin your journey.
