Prenuptial Agreements – not just for the rich and famous
It’s a common misconception that prenuptial agreements aren’t legally binding.
While courts in England are increasingly giving weight to these agreements, in Scotland we’re one step ahead.
Yet when most people think of prenuptial agreements, their thoughts turn to the glitz and glamour - and high profile separations - of Hollywood. But you don’t have to have millions in your bank account, or a mantelpiece heaving under the weight of several Oscars, to want to look after your interests, whatever happens.
Who needs a prenuptial agreement?
In reality, with divorce commonplace, and people tending to marry later (after accumulating independent wealth), prenuptial agreements are a useful way to provide certainty for the future and avoid costly litigation down the line.
The agreements
In the absence of a prenuptial agreement, the default under Scots Law is often equal sharing of the matrimonial property that, as well as the matrimonial home, includes all the assets and liabilities acquired during the marriage. This can include pre marriage money where it’s been reinvested by you.
While having one drafted is not always seen as a particularly romantic gesture, prenuptial agreements do provide necessary clarity: you can specify - and essentially ring-fence - assets held before the marriage, and stipulate what should happen to deposits, savings and investments, pensions, properties, and any other such possessions - and in particular those assets which might change over the course of marriage, with sale and reinvestment, creating newly acquired matrimonial assets.
For business owners, they might provide certainty and protection in relation to share ownership and company control.
Prenuptial agreements and succession
Prenuptial agreements are particularly useful when it comes to estate planning, for example in the rural sector where they can add an extra layer of protection in the family succession process - and might prevent farms being divided up in the event of a messy divorce.
Now what?
Scottish courts will not readily set aside these agreements if they are properly executed. So while in a country where almost 50% of marriages fail, it’s prudent to be realistic and plan ahead.
Each partner or spouse needs to appoint his or her own solicitor, and we recommend advice is sought well in advance of the wedding or partnership as agreements can take several months to finalise.
So whether it’s your first marriage, or your fifth, it’s worthwhile having the open and honest conversation with your partner to iron out the details, especially where you have an existing house, money or pension: providing security for the future.
After all, you wouldn’t get married with uncertainty about your future spouse, so why enter marriage with uncertainty about your pre-marital assets?
