EACH week The Scotsman gives you a top ten guide to pertinent financial issues.
Demand for prenuptial agreements has risen sharply over the last year, according to eight out of ten matrimonial lawyers, even though they are not legally binding in the UK. But with the Law Commission set to review the enforceability of pre-nups, R
achael Kelsey, a partner and family law specialist at Pagan Osborne, offers tips on getting one drawn up.
1 WHAT IS A PRE-NUP? A pre-nup is a contract entered into by a couple who are intending to marry and covers what the couple want to happen in the event of separating. They usually provide that certain property will not be regarded as matrimonial property if the couple go on to divorce – for example things bought during the marriage from assets built up before the marriage.
2 ARE THEY ENFORCEABLE? Scots Law has a long history of giving legal recognition to contracts voluntarily entered into by sane adults. A properly drafted pre-nup should be enforceable by the courts and this is the common view among senior legal practitioners in Scotland. This is not the case under all legal systems and English law, in particular, has a different approach.
3 WHY GET A PRE-NUP? If you're getting married and you have any assets, such as a house or savings, a pre-nup may well be necessary if you want to protect those assets from claims in the event of divorce.
4 CAN I GET A PRE-NUP IF I'M JUST LIVING WITH SOMEONE? No, a pre-nup is only for people intending to marry. But you can get a cohabitation contract, dealing with all financial issues including discharging the rights that cohabitants now have.
5 DOES IT MATTER WHEN THE PRE-NUP IS SIGNED? No. There is no particular time limit, but it's wise to have it signed well in advance of the wedding.
6 CAN I MAKE MY FIANCÉE SIGN A PRE-NUP? No. Pre-nups are voluntary contracts. Your fiancée needs to agree to sign any pre-nup.
7 IS IT EVER A GOOD IDEA NOT TO GET A PRE-NUP? There are sometimes instances in which you may be better off without a pre-nup. Factors that should be considered include your respective ages, earning capacities, wealth and if there are significant changes looming, like having children.
8 IS IT TOO LATE TO GET A PRE-NUP IF I'M ALREADY MARRIED? Yes, but you can get a post-nup. Post-nups are particularly useful if a couple's circumstances have changed since marriage, for example if there has been inheritance or if money is to be gifted by – or to – the couple.
9 CAN WE CHANGE THE PRE-NUP AFTER IT'S BEEN SIGNED? Yes, providing you agree that you can change the terms of the pre-nup at any time. The beauty of a pre-nup though is that if you can't agree on any changes you still have a pre-agreed framework of how to deal with your finances if you separate. That default framework was what you decided was fair and reasonable in your circumstances, rather than the "one size fits all" framework which is currently set down by the law.
10 LOCATION I'm English and there's a good chance that we'll go back to England sometime in the future. Does that make a difference?
Yes. English law is different from Scots law and you need to get advice that takes account of your circumstances.
You may need a mirror pre-nup in another jurisdiction.
The full article contains 606 words and appears in The Scotsman newspaper.
