Discussing Prenups | Living North

Discussing Prenups

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We are familiar and comfortable with the idea of insuring against theft or damage to our homes; against illness and even death, but when it comes to protecting our families against the financial consequences of divorce, the subject is all too often taboo

We all know the reasons why. Pre-nuptial agreements are seen as ‘unromantic’, and the idea of entering into marriage thinking about what would happen if it were to end somehow doesn’t feel ‘quite right’. 

Nobody buys a house thinking it will burn down, yet they still insure against it happening. So why not consider protection to minimise the consequences of divorce?  The fact you take out motoring or health insurance doesn’t make it more likely that you will have an accident or become ill. The sad truth is that one in three marriages today ends in divorce, and if you and your partner enter into a pre- or post-nuptial agreement, you can determine in advance how your assets will be shared should you separate. Making those decisions now will reduce the financial and emotional trauma of divorce – should it ever happen - enabling you both to move on and, importantly, ensure your children (if you have them) are provided for.

This is a pertinent issue for business owners, too, and any business owner contemplating marriage should consider a pre-nuptial agreement to reduce the risks to their business should the marriage end in divorce. That same advice should apply to your business partner or fellow shareholder, too, if the sale or transference of their interest could affect you. 

Some argue that ‘pre-nups’ aren’t legally binding, so why bother? While it’s true that pre-nuptial agreements do not remove the jurisdiction of the court, a Supreme Court decision three years ago has given pre-nuptial agreements far more weight. Pre- and post-nups allow couples to structure terms that fit their individual situation, instead of submitting themselves to the whims of the divorce courts if they divorce. As with any insurance policy, it requires regular review if your circumstances change to ensure it remains relevant. 

It’s true – pre-nups will always be seen as unromantic but, as with your other insurance policies, the hope is that it will sit in a drawer gathering dust and never be needed.  Not having one risks increasing the conflict, pain and cost of divorce and, if you have a family business, puts its continuance at risk. In our view, a pre-nup is one insurance policy well worth having.  

Silk Family Law, Keel House, Garth Heads, Newcastle www.silkfamilylaw.co.uk

Published in: November 2013

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