Partner Article

Why pre-nups matter in a material world

Divorcees who remarry and those who live together before ‘tying the knot’ are behind the growing popularity of pre-nuptial agreements.

Latest figures from the Office for National Statistics (ONS) show that, of the 240,854 marriages in England and Wales in 2013, 15 per cent were couples marrying for the second time.

As many have assets such as savings, property and other possessions from divorce settlements – not to mention children who may later inherit - this is making pre-nuptial agreements desirable for documenting the couples’ finances so there is a clear picture of what both parties bring to their new marriage.

Prenuptial agreements are also benefitting from the trend for couples to live together before marrying as each has more time to build up savings and assets, particularly women who have started careers before having children.

ONS figures show that the average age of couples marrying for the first time has risen steadily since the 1970s when living together first became widely socially acceptable. In 2013 the average age of women was 30.6 years and 32.5 years, for men, in both cases an eight-year rise from 1973.

Social and demographic advancements also mean that the traditional roles of ‘bread-winner’ and ‘home-maker’ have faded substantially with there now being greater parity and sharing of these roles between women and men.

This is nothing new. For centuries, marriage has been an arrangement of sharing property, or wives bringing dowries, while the romantic aspect of marriage, like the concept of childhood, is relatively modern.

Partner and head of family law at Harrowells Solicitors, York, William Kaye, says: “Although pre-nuptial agreements are still not strictly binding under English law, the judicial approach has changed to a position in which, subject to certain safeguards being met, there is a general presumption that they will be upheld by the court. They provide useful evidence of the bride and groom’s financial status and intended arrangements about dealing with finances during the marriage.

“Perhaps most importantly, they pre-determine financial arrangements between couples should they separate and divorce which avoids disagreements, wasted time and cost later. When people remarry their new spouse has an automatic statutory entitlement to bring potential claims for a share of their assets, unless estate planning documents, such as a prenuptial agreement, create other arrangements.

“A prenuptial agreement is particularly useful in cases where there is a significant difference in age and financial status between the husband and wife, such as owning a share of a family business, farm or inherited property, because it protects these assets before the marriage. This can mean that children from the earlier relationship can inherit as intended in the event of their birth parent’s death.”

Other factors that prenuptial agreements can help determine include creating a financial strategy for the new marriage by indicating which debts, such as mortgages, car loans or credit cards, are the responsibilities of one, or both, spouses, and in what proportions.

Prenuptial agreements can also allow a new spouse to waive rights as a beneficiary to a retirement plan, if, for example, the husband or wife would prefer for their children from a previous marriage to benefit from it.

William Kaye, a qualified collaborative family lawyer, says: “Although some will view prenups as ‘unromantic’, or uncaring, they are far from harbingers of doom for a relationship. Instead they can create harmony by encouraging objective discussion about the financial and non-financial contribution and support couples expect from each other in a practical way. They can also be amended over time, for example, if a couple have children.

“However, there must be “full disclosure” from both sides about income, assets and liabilities to eradicate any finding of misrepresentation, fraud or duress, any of which would make the agreement invalid.

“Those considering a prenup should bear in mind it needs to be signed at least 28 days before the wedding date to avoid any subsequent suggestions that a signatory did so under pressure. To avoid this, they should make contact with a lawyer specialising in this area at an early stage.”

Harrowells Solicitors offers a wide range of legal services to commercial, farming and private clients. The firm has three offices in York and others in Pocklington, Easingwold and Thirsk.

This was posted in Bdaily's Members' News section by Mike Clarke Communications .