What are the main reasons why more and more people enter into a prenuptial agreement in the UK prior to getting married?

Here are a few important ones.

Half The Cake – Fair?

Without a prenuptial agreement UK court awards on a divorce can sometimes appear to be rather a lottery. 

Approximately 50% of all marriages in the UK end in divorce and, on divorce, particularly in the case of wealthy parties, the starting point is often a 50:50 share of all property and assets. 

Where one party to a marriage is considerably wealthier than the other, the results can often appear very unfair (or very favourable depending on your viewpoint).

The ever-present danger for wealthy individuals without a pre-nuptial agreement in the UK is that they stand to lose 50% of their assets (sometimes more) if they divorce. This can mean houses and family property have to be sold to finanace the settlement and, for marriages of reasonably short duration, the disruption and financial loss can make the whole outcome look bizarre.

With a properly-drafted UK prenuptial agreement the parties to a marriage can go a long way to redressing the potential unfairness and uncertainty inherent in a UK court-imposed financial settlement.

Once Bitten-Twice Shy!

You may well have been divorced before.  The statistics make this increasingly likely.  Your assets may already have been depleted, even decimated, by what you consider to have been an unfair division of financial assets on your last divorce because you did not have a pre-nuptial agreement.  You do not want this to happen again.  If you do remarry you will want to make sure that any future financial division does not further erode your personal wealth beyond what you are prepared to tolerate.  With a UK pre-nuptial agreement you can at least be reasonably sure that the damage will not be as painful if there is to be a ‘next time’.

Inherited assets

One of the main reasons people consider entering into prenuptial agreements in the UK and elsewhere is to preserve inherited family wealth.  Some family assets have been “in the family” for generations and it is the intention that they should stay in the family and not be sold or depleted in the event of a divorce in order to satisfy a court-imposed financial settlement.  One party to a marriage may already have inherited family assets, or may have a reasonable anticipation of inheriting such assets in the course of time, perhaps during the marriage.  By entering into a prenuptial agreement it is possible for these inherited assets, or assets that may in the future be inherited, to be ring-fenced to a degree and with a reasonable expectation that they can be kept out of any future financial settlement on divorce. Without a pre-nuptial agreement you can be sure that they will be taken into account by the court.

Children and Dependants

If you are contemplating marriage and you have dependent relatives or children from a previous marriage, you may well want to ensure that their interests and well-being are not jeopardized on divorce.  By stating your financial intentions in a prenuptial agreement UK law allows you some latitude to protect your children and dependants. In effect, you can ensure that the interests or your ex-spouse on divorce do not take precedence over, or exclude altogether, the financial security of your children and other family dependants.

Overseas wealth

You may not be a UK resident and you may have property and assets outside the UK. If you decide to marry and settle in the UK, you may well not be aware of the fact that, on divorce, the English courts are quite likely to take into account your worldwide assets and divide them on a 50-50 basis between you and your ex-spouse.  Just because your assets are situated in another country does not mean that a UK court will not take them into account when you divorce.  On the contrary, a UK court will largely ignore how your overseas assets would be treated under the law of the country in which they are situated. So, if you divorce in the UK, the UK court may well effectively expect you to sell your overseas assets, even though that is not only contrary to your wishes but also to the wishes and expectations of your other family members in your own country.  The only way that you can seek to redress this outcome is by entering into a UK prenuptial agreement that is appropriate to your wishes and expectations ahead of getting married.

These are just a few considerations why you may want to enter into prenuptial agreements and why they can be so important in ensuring that your personal wealth, in the UK and worldwide, is dealt with equitably by the UK Courts in the event that your marriage comes to an end.

Everyone's situation is different. UK pre-nuptial agreements need to be customised and tailored to your personal circumstances. We would be pleased to hear from you to discuss your particular concerns and requirements without cost or obligation so please do not hesitate to contact us without delay.