The reality is that many marriages and civil partnerships do not endure and having a marital agreement (or pre/post registration agreement for those in or about to enter a civil partnership) can help to alleviate the acrimony and expense regularly encountered by those who are separating and/or divorcing.
Marital agreements are often regarded as unromantic and those suggesting one are often suspected of a lack of commitment or lack of trust. However, they are wonderfully practical documents and are becoming increasingly common as many are marrying later in life, or remarrying, and wish to protect the assets that they are bringing to the marriage. What’s more, since the landmark Supreme Court decision in the case of Radmacher –v- Granatino in October 2010, they are being given more weight by the court when considering an application for financial remedy upon divorce.
At Baxter Harries, we appreciate that discussions surrounding a marital agreement can be difficult, and we can help guide you through the process to ensure that your agreement is drafted in a pragmatic yet sensitive way.
- What is a nuptial agreement?
- A nuptial agreement is an agreement entered in to before (known as a ‘pre-nuptial agreement’ or ‘pre-nup’) or after marriage (known as a ‘post-nuptial agreement’ or ‘post-nup’) that allows a couple to plan how their finances should be arranged if they later separate or divorce. The same applies to civil partnerships but those agreements are known as pre/post registration agreements)
- Are nuptial agreements legally binding?
- No. As the law currently stands, nuptial agreements are not legally binding in England and Wales. This means that the court retains its ability to determine how your finances should be dealt with on divorce or dissolution of a civil partnership, and this cannot be overridden.That being said, since the landmark Supreme Court decision in Radmacher -v- Granatino in 2010 and recommendations subsequently published by the Law Commission, the court is increasingly taking the provisions of nuptial agreements into account, and is giving more and more weight to such agreements as a relevant circumstance of the case (provided certain safeguards are met).This means that if you enter in to a nuptial or registration agreement, you must expect to be held to its terms, because the court is likely to uphold an agreement that was entered in to freely and voluntarily by both parties with a full appreciation of its implications, unless it would not be fair to hold the parties to their agreement. For example, a nuptial agreement is unlikely to be upheld if it does not leave one party with sufficient funds to meet their needs or it does not adequately provide for the needs of any child of the marriage.
- What are the benefits of entering in to a pre or post nuptial/registration agreement?
- Some advantages of such an agreement are:- It provides clarity and certainty as to how your finances will be arranged if your relationship does not endure.- For those that are marrying for a second time or are bringing significant assets to the marriage, a pre or post nuptial agreement offers protection of assets and family members. For example, you can protect the interests of children from a previous relationship or marriage and you can protect assets you may wish to “ring fence” from being shared on divorce, such as inherited assets, gifts of property from a third party.- You have the freedom (to a degree) to agree how your finances will be arranged on separation and divorce without a solution being imposed on you by the court.- The existence of a pre or post nuptial agreement can reduce conflict on divorce. It is true to say that the more acrimonious the divorce, the more money is spent on legal fees in resolving matters arising from it. Having a nuptial agreement that clearly sets out the financial arrangements that are to be put in place should the marriage breakdown is likely to lead to fewer arguments about financial matters should you later divorce, and provides the opportunity to preserve an amicable relationship between you and your partner.
- How much does it cost to get a nuptial/registration agreement?
- The cost of having a nuptial agreement drawn up depends upon the complexity of the financial arrangements and the amount of time spent negotiating and agreeing the terms of the agreement. However, investing time and money in getting a fair agreement drawn up can result in considerably lower legal costs being incurred should the relationship subsequently break down and result in divorce or dissolution proceedings.Often one party to the agreement agrees to contribute to the legal costs of the other to help ensure that both of them have obtained specialist legal advice.The costs vary on a case by case basis, and much will depend upon the assets involved. At Baxter Harries, we aim to provide a competitive but high quality service and to ensure that clear and reasonable costs estimates are provided from the outset.
- I have entered in to / am about to enter into a civil partnership. Can I create a similar agreement?
- Yes, a similar agreement applies to civil partnerships. These are known as pre and post registration agreements.
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