A pre-nuptial agreement might seem thoroughly unromantic – Prince William refused one for his marriage to Kate Middleton – but as more than 100,000 couples get divorced in the UK each year, perhaps it’s not such a bad idea. We’ll take you through the pros and cons of pre-nups and help you decide whether or not to sign one.
- What is a pre-nuptial agreement?
- How do you get a pre-nuptial agreement?
- Pros and cons of a pre-nup
- Factors to consider if you decide to sign one
- Should you sign a pre-nuptial agreement?
In the USA ‘pre-nups’ are far more common than here, but then they are also legally recognised. Britain’s pre-marital agreements are not legally binding but, with the number of divorces increasing, they are often used as a basis for a settlement.
In fact, there have been hints from the government that such agreements should be taken more notice of – not least because of the potential cut in Legal Aid. That would put Britain more in line with the rest of Europe, where pre-nups have been widely recognised for some years.
Right now a pre-nup could prove persuasive to a court when a divorcing couple is arguing about who promised what to whom – but usually only when the marriage has been comparatively short and there are no children involved.
In fact, in 2009 a landmark case made it likely that pre-nups will be taken more seriously by the courts now.
Katrin Radmacher and Nicolas Granatino were married for eight years before they separated. They had two children together. Miss Radmacher came from a very wealthy German family and had personal wealth of around £100m. They had a pre-nuptial agreement saying that they should each go their separate ways on divorce.
In the first set of court proceedings Mr Granatino was awarded around £5.5m. However an appeal court slashed this award dramatically, allowing Mr Granatino only around £1m plus an additional sum for housing of £2.25m which is more of a loan.
In fact, neither court felt that Mr Granatino should get nothing at all, despite him having signed the contract prior to the marriage saying this. So the pre-nup wasn’t completely binding but it definitely made a difference to the divorce outcome.
Firstly you will both need to speak to your own solicitors. Family law firms are probably the most able solicitors to create one of these agreements. Contact the Law Society if you would like a list of practitioners in your area.
Then there are guidelines (set out in 1998) as to what should be in the agreement and the terms of drawing one up. These include:
- Provision must be made for children
- Both parties should have taken independent legal advice
- The agreement must not be profoundly unjust
- Full financial disclosure must have been made
- The agreement must have been drawn up at least 21 days prior to the marriage
Obviously both parties need to sign the agreement and the signatures should be witnessed.
- A pre-nup records what each person brings to the marriage. If you divorce at least you have something to refer to.
- It can raise ‘debatable’ issues like education of children and lifestyle that might have been buried in the run-up to the wedding.
- It can offer mental stability for both parties, particularly if one or both has a lot of money before marriage.
- It can keep the in-laws happy in certain circumstances!
- It can reduce the time and cost involved in divorce cases.
- The biggest problem is that it challenges with idea of living ‘happily ever after’, which can be stressful for everyone involved. Being asked to sign a pre-nup can make someone question whether the person they are to marry is really committed.
- It can be a complex and costly process to put together.
- It’s not yet truly enforced by British courts.
Pre-nups could be essential if you’re about to enter a second marriage (which have an even higher divorce rate than first marriages) and want to safeguard inherited family money, your business, or your children from a previous relationship.
- Is one partner wealthier than the other?
- What assets and debts does each partner bring to the relationship?
- Has each partner fully disclosed their financial position?
- Do you have children/dependants to make provisions for?
- Have both parties had independent financial advice?
- Have you addressed past, present and future earnings/earning power?
- Has your future partner got a lot more money than you? If so, try to avoid signing!
Should you sign a prenuptial agreement?
Ultimately, it’s a personal decision. Like drafting a will, drawing up a pre-nup might not be the most pleasant of tasks – but both are practical measures that can ensure peace of mind, and ensure your assets are allocated in a fair and considered way. A prenuptial agreement can be used to protect a spouse who is well off, but it can also be used to ensure that the partner who is weaker financially is protected. It all depends on your individual situation.
On a side note: if you do decide to get a pre-nup, it will involve both you and your partner going through all the assets and sources of income you both have. If nothing else, this process will help you plan your financial future more effectively!
how much money could you lose without a pre-nup?
Around two in five marriages end in divorce in this country (twice that many co-habitations fall apart) and it can be messy and expensive when it does, particularly if the marriage really only happened because one party wanted the other party’s fortune.
If pre-nups were mandatory and binding it would take all the emotion out of the issue at the start (you know, the ‘if you loved me you wouldn’t ask me to sign one’) and make things a lot easier if there were a split. It would also prevent some of those nasty gold-diggers from bagging their man or women (gold-digging men are on the rise I’m told).
The more money you have, the more important it is to have one. The process of divorce becomes a lot more complicated when the couple’s net worth is in the stratosphere.
So, what are the biggest divorce settlements and who has paid the most?
1. $1.7bn: Rupert and Anna Murdoch (1999)
2. $750m: Bernie and Slavica Ecclestone (2009)
2. $750m: Tiger Woods and Elin Nordegren (2010)
4. $425m: Mel Gibson and Robyn Moore (2011)
5. $300m: Roman and Irina Abramovich (2007)
6. $168m: Michael and Juanita Vanoy Jordan (2006)
7. $150m: Neil Diamond and Marcia Murphey (1994)
8. $100m: Steven Spielberg and Amy Irving (1989)
9. $90m: Madonna and Guy Ritchie (2008)
10. $85m: Harrison Ford and Melissa Mathison (2004)
Have you lost your shirt in a messy and expensive divorce?
Do you have advice for anyone considering tying the knot…or untying it?
Tell us in the comments below!