Unless you’ve been hiding under a rock you’ll have seen the media frenzy of the Royal wedding of Prince Harry and Meghan Markle which takes place this Saturday 19th May 2018.
There has been much speculation as to whether or not Meghan would be required to sign the pre-nuptial agreement by the Royal Family. Reports by the media say Harry and Meghan will not be signing a pre-nup. I was really interested to read the medias take on why this might be with comments such as “Royal wedding is not a celebrity wedding” “Pre nups are new and unpopular” and “It makes sense for Harry and Meghan not to sign a pre-nup as inheritance is not subject to division on divorce”. I thought I would give you my take on these three statements.
“Royal wedding is not a celebrity wedding”
Pre-nuptial agreements were once considered to be only for the rich and famous or most commonly the footballers of the world. However, in my view every single person contemplating marriage should at the very least consider the possible benefits to having a pre-nuptial agreement in place. Below I have summarised some of those benefits.
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Clarity – By entering into a pre-nuptial agreement, you and your partner can make it clear to one another that certain property belongs to you only and will not be shared in the event of a divorce and certain property will be considered joint and shared between you.
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Certainty – By agreeing how your finances will be divided if you later separate or divorce, this saves you both the uncertainty, time and stress of going to court about your property and finances
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Save money – While you and your partner will incur legal fees for preparing and advising on the terms of the pre-nuptial agreement, it is usually much less expensive to do this than to go to court about the division of your finances should you later.
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Protection of family members – You or your partner may have children from a previous relationship and may want to protect some of your assets so that you can pass them to your children in the future rather than such assets being divided upon divorce.
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Provision on death– The terms of a pre-nuptial agreement can support the provisions of your Will in terms of how you would like assets to pass upon your death.
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Protection of business partners – If you or your partner have an interest in a business, the pre-nuptial agreement can protect that interest and prevent disruption to the business if the marriage breaks down in the future. This could prevent your partner from being awarded an interest in the business or being involved in the running of the business in the future if you were to divorce.
“Pre nups are new and unpopular”
Historically, pre-nuptial agreements were considered against public policy in England and Wales and were, to use the common phrase, “not worth the paper they’re written on”. However, there has been a major shift in the last decade in respect of the enforceability of pre-nuptial agreements by the courts following the landmark decision in the case of Radmacher (formerly Granatino) v Granatino [2010] UKSC 42. In this case, the Supreme Court held that decisive weight could be given to a nuptial agreement that has been entered into freely by the parties on the basis that they fully understand the implications of the agreement, taking into account the circumstances of the case so long as it would not be unfair. Therefore, whilst the court still has the overriding authority when considering such agreements, if you sign one you should only do so expecting to be held to its terms.
“It makes sense for Harry and Meghan not to sign a pre-nup as inheritance is not subject to division on divorce”
This is not the case. Whilst inheritance does not on the face of it form part of the matrimonial assets to be divided on divorce, it is a resource that is available to one party and if needs cannot be met from the available matrimonial assets the Court can consider how any inheritance should be utilised to meet the needs of the parties. Therefore, if you or your partner have or expect to have in the future inherited assets, the pre-nuptial agreement can “ringfence” these assets from the marriage so that they are retained by the person who receives the inheritance. If you have entered into a pre-nuptial agreement which ringfences such assets, the court is less likely to award a share of that asset to the other party on any future divorce.
Hopefully the above information helps to clarify the reasons why you may wish to consider entering into a pre-nuptial agreement in advance of marriage.
If you would like more information or would like to go ahead and prepare a pre-nuptial agreement please do not hesitate to contact our experienced matrimonial team on 0113 322 9222 or by email at enquiries@consilialegal.co.uk.