How to write a prenuptial agreement?
Planning a wedding? A prenuptial agreement may be the last thing on your mind, but it’s worth knowing what a prenup is and how it might be beneficial.
A pre-nuptial agreement is an effective way of protecting assets acquired before marriage. A prenuptial agreement will narrate what is to happen in the event of separation, ring-fencing certain assets so as to exclude them from the matrimonial property.
It is very important that both parties seek separate and independent legal advice in relation to the prenuptial agreement. It is also important that specialist family law advice is sought well in advance of the wedding to ensure that both parties have sufficient time to consider the terms of the prenuptial agreement. In the event that advice is sought at a time where the wedding is imminent, it is better to consider entering into terms of a Post-Nuptial Agreement which is drafted and signed after the wedding.
A prenuptial agreement can ensure that assets acquired prior to marriage by one party to the marriage or alternatively, where both parties are bringing assets and wealth to a marriage, are protected in the event of separation.
What is a prenuptial agreement?
A Prenuptial Agreement, also referred to as a prenup or , premarital agreement is a legally binding contract entered into between two individuals intending to marry . A prenuptial agreement will narrate the ownership of certain assets in the event that the marriage breaks down in the future.
A prenuptial agreement will define property known as ‘separate property’ held by each party prior to the marriage and narrate how the separate property is to be treated on separation. A prenuptial agreement is a valuable tool to reduce conflict in the event of separation and legal expenses in resolving the financial matters of separation. It can be used where a party brings significant wealth to a marriage but can also be used by any party wishing to protect an asset acquired prior to marriage, inheritance or gifts from third parties.
A prenuptial agreement can assist parties prior to entering into a marriage to communicate about their financial circumstances and encourages transparency. It can be tailored to suit individual circumstances subject to the parties ensuring that they seek specialist legal advice on its terms.
Why and when would you need a pre-nuptial agreement?
Entering into a marriage is a significant commitment. This commitment results in assets which a party may consider to be solely their asset such as property, income, and pension contributions becoming ‘matrimonial property ‘ in terms of the law.
By entering into a Prenuptial Agreement, parties can consider assets they are bringing to the marriage and whether they wish these to be disregarded from the definition of matrimonial property upon separation. It provides more certainty for parties in the event of separation.
It is important to bear in mind that a prenuptial agreement can only be entered into before marriage and where both parties have had sufficient time to consider its terms. It is open to parties to enter into a Post Nuptial Agreement ring-fencing assets after marriage, although there is an element of good faith required by the parties as they have already married by the time of its signature. A Post Nuptial Agreement can also be considered by parties at a much later stage in a marriage in the event of a material change in the financial circumstances of a party to the marriage.
Content of a prenuptial agreement
Creating a prenuptial agreement requires careful consideration, specialist legal advice, disclosure of all assets and liabilities, and clear communication between both parties. Information which is commonly found in a prenuptial agreement is as follows:
- Identification of the Parties: The full l names of both parties, their address and date of the wedding
- Definitions of important terms in the Agreement: Definitions of terms such as ‘separate property’ will be narrated. A list of the ‘separate property’ should also be included in the prenuptial agreement.
- Consideration of the treatment of income during the marriage or where separate property is partly used to acquire property which would be matrimonial property. The binding nature of the Agreement: the Agreement will narrate that both parties have had the benefit of separate and independent legal advice and fully understand the significance of the Agreement and its terms.
- Signatures: The agreement requires each parties’ signature which must be in the presence of an independent witness, ideally their respective legal advisors.
- It is crucial that parties seek advice from a solicitor experienced in family law and prenuptial agreements. This will ensure the Agreement covers all the relevant details, that parties have been fully advised about the implications of the Agreement and minimises the risk of it being challenged in the future.
Who Can Write a Prenuptial Agreement?
- Understanding and navigating prenuptial agreements can be complex. Prenuptial agreements should be drafted by a solicitor who is experienced in family law. Attempting to draft a prenuptial agreement without specialist legal advice is risky and should be avoided. as it significantly increases the chance of the agreement being reduced in the future.
- A potential future challenge to the content of a prenuptial agreement would be far less likely to be considered by a Court where both parties have had the benefit of separate and independent legal advice. Engaging an experienced and knowledgeable solicitor is highly advised. It is the most effective method to safeguard your assets and interests, given their comprehensive understanding of how pre-nuptial agreements work.
The guidance of a legal professional is strongly recommended to guarantee the enforceability of the agreement and the protection of your interests.
How to make sure your prenuptial agreement is legally binding?
It is very important that specialist legal advice is sought when considering the terms of a Prenuptial Agreement. Both parties should ensure that they have had the benefit of separate and independent legal advice. This will ensure there is limited scope for the agreement to be challenged in the future. Where an agreement has been properly drafted and meets certain requirements when it is entered into, it is very likely to be upheld in the event it were to be challenged in a Scottish Court.
It is important that there is no pressure on the parties to sign the agreement and it is not signed too close to the wedding. The terms of the agreement must be fair and reasonable when it was entered into and should not depart significantly from the legislative framework which sets out what is to happen in the event of separation.
Reach out to our Family Law team
For any needs related to prenuptial agreements, reach out to our experienced family law specialists. Our team is experienced in creating both prenuptial and postnuptial agreements. We understand that marriage is a significant step in life, and we aim to provide you with the assurance and peace of mind you need in this important phase. Contact Harper Macleod today and let our expertise guide you through this crucial process.
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