Getting married like Harry and Meghan? Should you have a pre-nup?
Prince Harry and Meghan Markle have decided not to sign a pre-nuptial agreement before their wedding, it has been reported, despite them both having obviously considerable assets.
A friend of Prince Harry's allegedly told a national newspaper: "There was never any question in Harry's mind that he would sign a pre-nup. He's determined that his marriage will be a lasting one so there's no need for him to sign anything."
So, are Harry, with an estimated £30 million fortune, and Meghan, with her own not insubstantial assets to protect, simply being romantic in refusing to contemplate the prospect that they might one day divorce….or foolhardy?
What exactly is a pre-nuptial agreement?
A pre-nuptial agreement, commonly known as a pre-nup, is a formal contract entered into by a couple before they marry or become civil partners which defines exactly how their assets will be divided if they separate or divorce. A pre-nup can also regulate how finances can be managed during a marriage or civil partnership.
Are they just for the wealthy?
No, they are commonly taken out by couples who have acquired assets before they marry or become civil partners, who have children from other relationships, who want to protect an inheritance and those with a family business and other assets including property to ring-fence. They are also increasingly being used by parents helping their children onto the property ladder as a means of protecting financial contributions from third parties.
There is no doubt they are rising in popularity with some figures suggesting that enquiries about agreements have risen by as much as 70 per cent over the last decade.
In addition, an increasing number of people entering into a pre-nup are between 31 and 45, suggesting that getting married later is leading to couples with more complex finances taking steps to shore up their assets from the dangers of a future split.
Are they legally enforceable?
This is where it gets slightly tricky.
Currently, a pre-nuptial agreement is not automatically binding upon the court which can take into account some, none or all of it.
But following a landmark decision in 2010, when judges enforced a pre-nup agreement designed to protect German heiress Katrin Radmacher's £100 million fortune during her divorce from financier Nicolas Granatino, courts seem prepared to give them more weight and uphold them provided certain conditions are met.
To be a 'qualifying' agreement, the pre-nup must be:
- Fair in all circumstances;
- Not made within the 21 days immediately before the wedding (or civil partnership);
- Drawn up with full and frank disclosure of both parties assets and liabilities;
- Made when both parties have received independent legal advice;
- Signed by each party free from undue influence or duress.
Resolution, the association for family lawyers, is calling for a change in the law to make the agreements legally enforceable thereby removing the uncertainty and stress if a relationship ends and they are contested in court.
Can I alter a pre-nup during my marriage or civil partnership?
The answer is yes. Obviously, circumstances can change during a marriage or civil partnership - one partner may decide to stay at home to look after children, for example, or there might be illnesses to navigate or other unforeseen life changes.
In fact, it is highly advisable to have a review clause especially when children are born or adopted or within say five years of the original agreement being signed.
When a court considers the fairness of an agreement, all the relevant circumstances are taken into account. And updating a pre-nup by addendum will keep it relevant and thus reduce the risk of it being challenged.
Is a pre-nup for you?
At Wards Solicitors, our family lawyers will be able to provide you with practical advice when considering whether or not you should enter into a pre-nuptial agreement based on the current legal system, up to date case law and your individual circumstances.
If you want to talk to someone about a pre-nuptial agreement, or any aspect of family and divorce law, please contact Wards Solicitors' Family and Divorce Team or pop into one of our 11 local offices.