Pre nuptial agreements or post nuptial agreements are a good way to have financial certainty during the best times so that, if the marriage were to breakdown the parties would not have the cost and stress of sorting out their finances because they have already agreed as to how the finances will be resolved.

There is no specific rule as to when the pre nuptial agreement should be signed but it is advisable that this should be done 21 days or more before the marriage.

It used to be that pre-nuptial agreements did not carry a lot of weight or they were ‘ not worth the paper they are written on’ .  However, following important case law in 2010 this has changed and nuptial agreements will stand as long as the right elements were in place at the time of signing them.  The court said in the case ‘the court shall give effect to any nuptial agreement that has been freely entered into unless in the circumstances prevailing it would not be fair to hold them to the agreement’ provided that the following elements were in place at the time of entering into the agreement

1. Firstly, both parties must have had the opportunity to take such independent legal advice as they consider appropriate

Whether both parties actually take that independent legal advice is up to the individual but they must record  on the agreement that they have had the  opportunity to take the advice in order to demonstrate that neither entered into the agreement under duress.  The advice each party takes or has the opportunity to take must be independent from each other so in other words they cannot receive advice as to whether or not the agreement is fair from the same solicitor; they must each have independent advice.

2. Secondly, both parties must be fully aware of each other’s financial and personal circumstances at the time of the agreement. The rule of thumb is that both must be transparent and disclose to each other all their assets, income pensions and debt information.  This is recorded in a schedule which is attached to the pre nuptial agreement.  Whilst it is not obligatory to provide documentary evidence, the more that each party discloses at the time of the agreement the more weight will be attached to the agreement. The parties should disclose the following:-

1. Their monthly income from all sources including employment, self-employment, benefits, income from lodgers etc
2. The valuation of any capital assets such as property, shares, ISAs endowmenets
3. balances of any bank accounts in the parties’ sole name or accounts they hold with another either current or savings
4. the ‘Cash Equivalent Transfer Value’ or ‘ CETV’ of any pension
5. the balance of debts such as credit cards or loans.

3. Thirdly, the agreement must not be such that would leave either party in financial hardship.  This is mainly relevant to those who are choosing for what ever reason for one party to work and the other not to work (eg those planning a family)

Provided all these are present at the time of reach agreement then the court will not interfere with the agreement that the parties have freely entered into.

The contents of a prenuptial agreement

Provisions that

1.  Each party keeps what they bring in, what they earn, what they inherit and this is not mingled with matrimonial finances
2. To the extent that the separate property does not meet needs the parties could have a joint fund to ‘top up’ to meet modest need
3. Sharing of the capital of the family home they live in is expressly ruled out (for example if they both own property but they choose to live in one of them).
4. Work which is carried out  or funded by the non owning party  on the property  they live in should expressly rule out a future claim.