What is a Pre-Nuptial Agreement?
A Pre-Nuptial Agreement is an agreement that a couple enter into before they marry, which sets out what they would want to happen to their financial affairs in the event that the marriage unfortunately breaks down and that describes the financial arrangements for you and your children in case of future separation. The most common reason people come to talk to us to explore having a Pre-Nuptial Agreement is because they want to protect a particular asset that they have before they marry. Older couples marrying again may want to ensure they pass on their assets to the dependents of their previous marriage.
Prenuptial agreements are really important for people entering second marriages especially when they have children from a prior marriage or business owners who start a business before they get married. It’s just a way to ensure that if there is a divorce that the rights and obligations of assets or children from a prior marriage are protected. Pre-Nuptial Agreements are particularly beneficial to parties who have wealth to bring to a marriage or alternatively have a business or estate. For a property that has been in the family for many generations and he may wish to leave that property to other members of his family.
If a couple enter into them knowing and fully understanding the implications, if there’s no sense of either of them being forced to enter into them and the terms are fair they should be upheld. A Pre-Nuptial Agreement is capable of being contested, which means it’s particularly important if you’re going to enter into one of these agreements you take specialist legal advice to give the maximum possibility and opportunity for it to be upheld in the event a divorce does happen. One of the most common reasons for a prenuptial agreement perhaps not being upheld would be if the terms weren’t fair.
A prenuptial agreement can’t simply say one party gets everything. And that’s one of the things that a specialist lawyer would be able to talk to you about. In the event of a divorce, if there was a prenuptial agreement in place, the terms of it, if both parties agreed that they were happy that that was the way that the financial matter should be resolved, lawyers with then take the terms of the prenuptial agreement and put it into something called a consent order, which when approved by the court would then be binding on the couple and there could be no further claims made by either of them again in the future. I do think there is a connection between the rise in marriage and the acceptance of prenuptial agreements.
Today, one of the reasons why people were hesitant to enter into marriage were because they were aware that in the event of a divorce it could have a considerable effect on their assets, and there were perhaps assets that they owned prior to marriage that they may want to protect. What prenuptial agreements do is offer people the opportunity to protect those assets in the event of divorce and, therefore, give people the confidence to marry, who otherwise might have been deterred. If you think about entering into a prenuptial agreement and want to find out more information I would certainly recommend picking up the phone and talking to a specialist family lawyer.
A Post-Nuptial Agreement is an arrangement entered into after marriage. Couples that may want to think about a postnuptial agreement tend to be those who have separated and who are reconciling or alternatively are going to acquire some wealth via an inheritance or gift from a family.
There are a lot of different situations that would warrant the signing of a post-nuptial agreement. They’re typically done when a party is going to inherit a large sum of money or take over a family business during the course of a marriage and they want to make sure that that family business or other asset is protected in the event of a divorce.
Validity of Pre-Nuptial Agreements.
I’m often asked whether pre and post nuptial agreements are actually legal and the answer is – they are not as legal as a commercial contract would be as in Indian Culture and Family Law marriages are the rituals not the contracts. However, providing that they are entered into freely, both parties have had the benefit of legal advice then there is case law to confirm that they will be upheld. I think the most important thing is you have to weigh up the emotional strain and distress that is created on divorce when people haven’t thought these things through. Both prenuptial agreement and postnuptial agreement can help to decrease the conflicts between both the parties.
One important thing to note about prenuptial agreements is that courts have consistently found that you cannot predetermine what’s in the best interest of the children in terms of who will have custody of children and you can’t predetermine child support so even if those provisions are included in a prenuptial agreement the court we’ll re-evaluate child custody and child support at the time of the divorce.
Reasons to avoid Pre-Nuptial Agreements:
- A Pre-Nuptial Agreement can be perceived as not romantic or unsocial. During the engagement or wedding ceremony, it is not appropriate to discuss what to do if the marriage breaks down or how the process of separation will take place after break down.
- If a young man and woman starting their family life with no property or assets, a prenuptial conversation can bring up some trustworthy issues and one of them may question the real motive of getting married.
- It is very difficult to predict and forecast every possible change in future circumstances of both the parties that might happen between the time a prenuptial agreement is written and a divorce.
- At the time of writing of prenuptial agreement the terms and conditions on which both the parties are agreed seems fair and reasonable but during the passage of time the conditions of prenuptial agreement might seem extremely unfair to either of the partners twenty years later
- In India family law does a fine job regulating couples’ finances and may protect you without a prenuptial agreement
Advantages of a Pre-Nuptial Agreement:
- The main and foremost common issue arises after the dispute is payment of permanent alimony, shares in property, monthly maintenance amount or we can say that the main reasons for divorce is financial disputes between parties. Deciding it all before the engagement or marriage will help to reduce conflicts and save money in case of separation or divorce.
- Pre-Nuptial Agreement can safeguard both the parties’ self-earned/acquired property.
- Pre-Nuptial Agreement provides freedom and it helps you to plan your property and business.
- Pre-Nuptial Agreement outlines what property is considered marital or individual property.
- Pre-Nuptial Agreement reduces conflicts and saves litigation fees and cost if you decide to divorce.
- Pre-Nuptial Agreement elucidates special agreements between you and your future spouse.
- Pre-Nuptial Agreement establishes processes and rules for deciding future matters.
Criteria of Pre-Nuptial Agreement
- It must be reasonably fair for you and your children
- Full disclosure was made of both parties’ financial situation
- Independent legal advice was taken
- No pressure was applied when the prenuptial agreement was signed. The law is soon likely to change to permit Pre-Nuptial Agreements to be fully enforceable as contracts as long as they have been correctly set up.
A prenuptial agreement should be settled and signed not less than three weeks before the marriage.
More and more couples are now considering it as a way to protect against future claims, particularly if a marriage breaks down in the early years. Older couples marrying again may want to ensure they pass on their assets to the dependents of their previous marriage. Although the law currently requires the courts to decide a financial settlement even if a married couple has Pre-Nuptial Agreement, it will influence the outcome of a court decision or may be followed exactly, as long as it meets above mentioned criteria.
A fair agreement will ensure the right provision is made for you, your partner and your children, and negate the pain and expense of contested court proceedings.
The legislation should amend the present law and treat the Pre-Nuptial Agreements as legal as a commercial contract would be provided that they are entered into freely, both parties have had the benefit of legal advice.
The another and significant suggestion to the legislation is to modified the law so that the property owned before marriage are separate property and those acquired during marriage are joint property that is owned fifty-fifty by both of them.
I my opinion it weigh up the emotional strain and distress that is created on divorce when people haven’t thought these things through. A Pre-Nuptial Agreement and a postnuptial agreement can help to reduce that stress.