Prenuptial Agreements: do I need one?
There are two overarching reasons why a couple might enter into a pre-nuptial agreement; (i) to protect existing or future assets; and/or (ii) to try to regulate at the time of the marriage how financial resources should be divided in the unfortunate event that the marriage breaks down.
It is a common misconception that pre-nuptial agreements are the reserve of the super wealthy and famous. There can be a number of reasons for any couple to enter into one;
1. to protect current or future inheritance, gifts, assets;
2. to make provision for children from a previous marriage;
3. to protect one party from the other party’s debts;
4. to safeguard business interests and future profits;
5. to provide certainty in the event of divorce; and
6. to avoid litigation and save time and costs in the event of divorce.
Whilst pre-nuptial agreements are not legally binding in this country (the law in this area is constantly evolving, and subject to change), since the landmark legal decision in Radmacher v Granatino (2010), provided a nuptial agreement (pre or post) is entered into ‘correctly’, such that certain criteria are met (e.g. there has been an exchange of full financial disclosure, each party has taken independent legal advice, there has been no duress/fraud/misrepresentation, provision has been made for any existing or future children, and the parties’ reasonable needs are met by the agreement), it will be highly influential and will form part of the relevant circumstances of the case such that it is likely to be upheld by the court.