Prenuptial agreements, more commonly known as ‘prenups’, are formal written contracts between a couple entered into prior to their marriage or civil partnership. They are most often designed to regulate the division of assets in the event of divorce or dissolution of the civil partnership. They can deal with other issues, such as ongoing support or the payment of school fees.
Prenups are not just for the rich and famous. They are becoming increasingly popular for many couples. Some feel uneasy about suggesting a prenup to a future spouse because this could be seen as unromantic or implying that the marriage will eventually break down. But a prenup can save time and hassle in the future. It could also be said that a couple prepared to talk openly with each other about their finances will build a strong and trusting relationship.
Some people go into a marriage with significant existing assets. They may have children from a previous marriage, and a prenup is a way to protect assets for themselves and their children.
What can I protect in a prenup?
Prenups are typically used to ring-fence certain assets in order to exclude them from the matrimonial pot. They are flexible in terms of the extent of the assets that can be protected. Typical assets may include properties, savings, investments, business interests or motor vehicles. A prenup is also advantageous if there is, or will be in the future, inherited wealth received by one or both parties.
Are prenups legally enforceable?
In Scotland such agreements are legally binding and enforceable. The courts in Scotland will recognise a prenup if it was fair and reasonable at the time it was entered into. Therefore, the focus will be on the circumstances surrounding the preparation and signing of the agreement. Important factors to consider include:
- No indication of one party being pressurised into signing the agreement.
- Whether parties each had sufficient time and opportunity to take independent legal advice before entering into the agreement. A prenup is unlikely to be at the forefront of your mind when planning a wedding. However, if you have assets that you want to protect, you should bring the subject of a prenup up with your future spouse well in advance of the wedding.
- There must be transparency. Failure to disclose assets at the time of signing a prenup could result in the agreement being deemed unfair.
Prenups are recognised in many countries, but not all. We can advise you on a prenup under Scots Law, but it may not be enforceable in another country. If you intend to move to a different country in the future, you should take legal advice in that country regarding the terms of your prenup. You should check if you will need a new prenup, or a postnuptial agreement, as the case may be.
Seek legal advice
The terms of a prenup will have significant legal consequences for a couple if they decide to separate. There are also complex legal issues to be considered when drafting a prenup. It is therefore important that you seek advice from a solicitor with experience in this area as early as possible. Each party should be represented by their own independent solicitor to be properly advised about the consequences of signing a prenup. You may not wish to incur legal fees before you get married, but a prenup will reduce the risk of acrimonious and costly legal proceedings in the event of a future separation.
Of course, all couples hope that their marriage does not fail and a prenup will never require to be used. However, a prenup provides a clear picture as to what would happen in the event of separation or divorce occurring and will give you and your partner peace of mind.
We can guide you step by step to create a prenup that is tailored to your set of circumstances. Please contact us or call us on 0131 226 9168.
The content of this page is for information only. It is not intended to be construed as legal advice and should not be treated as a substitute for specific advice. Gibson Kerr Ltd accepts no responsibility for the content of any third party website to which this webpage refers. Gibson Kerr Ltd is regulated by the Law Society of Scotland.