If you are in the process of arranging a wedding with your significant other it might be wise to discuss the potential for a prenuptial agreement. There are benefits for both parties to sign a ‘pre-nup’ prior to getting married, giving you both peace of mind that all financial aspects of your relationship are detailed and in the worst cases, you understand how your finances will be split in future. He we take a look at prenuptial agreements and the details behind them.
What is a Prenuptial Agreement?
A prenuptial agreement is a legal document that details an agreement between two individuals who are planning on getting married or undertake a civil partnership. This legal agreement will detail, in full, the finances and assets of each individual at the time of their marriage or civil partnership starting. A prenuptial agreement is also designed to specify exactly how the financial assets of each person is to be split in the even of the relationship breaking down irreparably in the future.
In a lot of cases people are happy to enter marriage without a prenuptial agreement, understanding that their assets will in future be marked down as matrimonial assets in the event of a divorce. In these cases assets are split equally between both parties, no matter the specifics of each person and varying degrees of wealth. A prenuptial agreement gives peace of mind in situations where one, or both, of the individuals wish to protect certain aspects of their life. So for instance, if one party has started and built a business prior to meeting their partner, they may want to protect that business for their own keeping in the event of a split. Another example is where there has been money or possessions inherited from a family member, or they may wish to protect certain assets and cash in order to hand down to children from a previous relationship upon their death.
Creating a Prenuptial Agreement
When thinking about putting together a prenuptial agreement it is important to be in complete agreement with your partner. Going into a marriage disagreeing about whether or not to sign a pre-nup is not a good start to the relationship. The agreement will be created based on your specific financial circumstances, so it is important to work with experienced and knowledgeable solicitors who practice in prenuptial agreements and understand their importance for both parties.
There are a number of benefits to a prenuptial agreement, including:
- If you own multiple properties, separate from your partner, you can protect these investments
- It can become a central part of your estate planning, protecting investments for your children and significant others upon your death
- Helps you to both understand and define which assets and property are considered marital
- In the event of a divorce, a prenuptial agreement can save time and money, reducing conflict in the process, as you’ll have pre-established ground rules on how to decide future financial matters
- If you have any special agreements in place with your partner, a prenuptial agreement is the place to define and document them