Pre-nups: who needs one and why

Pre-nuptial agreements (pre-nups) are becoming increasingly popular to help define and protect assets brought to a first or second marriage. LGFL’s Finance Director Anne Leiper explains what they are, what they should cover, and why UK courts are taking notice of them.

Beloved by US celebrities and divorce attorneys, a pre-nuptial agreement sets out what each person brings to a marriage in terms of their assets. This can includes assets, property, pensions, investments and even heirlooms. The pre-nup (sometimes known as a pre-marital agreement) lays out what will happen to these assets if the couple separate or divorce.

Whilst pre-nuptial agreements are not currently legally binding in the UK, a court will take one into consideration and may even uphold it, thanks to a Supreme Court decision back in 2010.

As divorce financial settlements usually use a 50/50 settlement as a starting point, a pre-nuptial agreement can help separate and protect assets accrued before the marriage. If you are embarking on a second marriage, your pre-nup can help protect these pre-acquired assets for your first family including children and grandchildren.

Want to draw up a prenuptial agreement? Call us at LGFL and book your initial consultation on 01189 735521.


Pre-nuptial agreements: terms and conditions

The most important feature about any pre-nup is that it is freely entered into by both parties who fully appreciate what they are signing. If there is any hint of hiding assets, coercion to agree to unfair terms, or enforced signing such as presenting a pre-nup the night before the wedding, the court will dismiss it.

There should also be no significant change of consideration (circumstances), since the pre-nuptial agreement was first created. Changes could include the need to support a new family, or changes in the requirements of a first family.

In general, a court will look at a professionally drawn-up pre-nup and recognise that is has been signed by two sensible people, who have come to this arrangement having taken professional advice.


Are pre-nups legally binding?

Under the present law, when a couple divorce and cannot agree on a financial settlement, the court can factor in any other circumstances that are relevant. So, whilst pre-nups are not legally binding on a court, the current case law is that they are a relevant circumstance that the court will consider.

Usually a court takes into consideration that that you and your partner have taken the time and trouble to create a pre-nup. In my experience, a court will say, well, if these parties have reached this agreement, why should they not be bound by it? Why should they not have that implemented, if they went through a proper procedure to agree? Why should we overturn it?


Creating a proper pre-nup

To stand the best chance of success, your pre-nup should be drawn up with:

  • full disclosure of all assets and property
  • each party receiving independent legal advice
  • both parties entering into the agreement of their own free will
  • both parties fully understanding the terms of the pre-nup and agreeing to be bound by them
  • the pre-nup signed at least 21 days before the wedding
  • a pre-signing breathing and post-signing cooling off period

In addition, your pre-nup must be:

  • ‘reasonably fair’


  • reflect the current situation within your family.

A court cannot consider a pre-nup if it would be impossible to implement because new children have been born. In this case, the court could and would override it. “Fair” is not straightforward to define, but basically assumes that the terms of the pre-nup would be within the remit of what a court would order in all the circumstances of the case.


The benefits of a pre-nup

In short, if you have any assets to bring to your marriage, a pre-nup can protect them.

Ringfence your assets and property

A pre-nup makes it clear which assets are yours, and which are shared. Assets singled out in a pre-nup are known as "non-matrimonial property”.

Clarity if you do divorce

If you split, a pre-nup makes it clear how your matrimonial and non-matrimonial assets should be allocated. This can save on a lot of costly arguments about the division of assets in court!

A good investment

You may never need your pre-nup, but it’s a wise investment / insurance policy. The cost of setting up a pre-nuptial with a family law firm such as LGFL will be considerably cheaper than litigation over shared or separate finances.

Safeguard family heirlooms

A pre-nuptial agreement can help define and secure family items from your soon to be spouse or their family. This ensures that if you separate, your spouse can’t get their hands on and sell family heirloom items such as art, jewellery, or antiques. It can also be used to protect a share in the family business, or gifts received from a third party. By ring-fencing both valuable and sentimental items, you are then free to pass them on to the next generation through your will.


Pre-nups for second marriages

If you are planning a second marriage, a pre-nuptial agreement could be key to ensuring you protect your existing assets and also preserve them for your first family, whether children or grandchildren. This includes all your financial assets such as investments, pensions and property, as well as personal possessions and family heirlooms.

A pre-nup will define your worth at the time of your marriage, to make clear what you brought to the marriage and what pre-existed it, and what was accrued after your second marriage. It also sets out the ongoing contributions you make or will make.

Remember, a pre-nuptial agreement is only used if you separate or divorce. Your wishes for how your estate should be divided after your death must be laid out in your will. You’ll need to make a new will when you remarry anyway, as your second marriage automatically invalidates any previous will you have made.


Pre-nups for millennials

Many millennials are marrying after they have already set up their own business, bought a house, or accrued a small portfolio of assets, pensions and savings. They may also be set to inherit heirlooms from grandparents, or become part of the family business, and are drawing up pre-nups to protect all these assets.

Equally, they want to have a pre-nup in place so they will not be saddled with their spouse’s outstanding debts such as a student loan, if they separate. It’s a big concern: according to a report by Student Loan Hero,

“More than 10% of divorced borrowers blame their divorce on student loan debt.”

In addition, it is estimated that a third of millennials are children of divorced couples themselves. Their experience makes them more aware of the need for a pre-nup that manages expectations, should they separate.


Protecting your business

If you have an interest or are partners in a business, a pre-nup can help prevent your spouse or their family taking over your interest. If your marriage breaks down, a pre-nup can help prevent disruption to the business or interference by your ex spouse and/or their family.


Need professional advice on a prenuptial agreement?

Call us at LGFL on 01189 735521. We have helped all types of couples define exactly what they bring to a marriage or civil partnership, and help secure what’s important to them for consideration in any future divorce or separation.

For more in-depth information on nuptial agreements and relationship planning, why not watch Managing Director Rita Gupta’s MBL training webinar. Here’s a three-minute preview to whet your appetite!