Wedding bells are ringing this weekend for the highly anticipated nuptials of popstar Taylor Swift and NFL player Travis Kelce. There has been much speculation about the venue, the dress, the guest list... and also, the pre-nup!
It is more widely accepted that pre- and post- nuptial agreements are not just for the rich and famous, and here at Thorntons, we have certainly seen an increase in enquiries from clients regarding these agreements.
What is a pre or post nuptial agreement?
A nuptial agreement is a contract between two people who are planning to get married (prenuptial) or are already married (postnuptial). The purpose of the agreement is to set out how certain assets might be treated in the event that the marriage was to breakdown.
What do they do?
Prenuptial agreements are most commonly used to ringfence and protect certain assets from being subject to division if the relationship comes to an end. The agreement can set out exactly how those particular assets are to be treated on separation and usually, they are to be excluded from consideration when looking at the matrimonial property. The agreement can also clearly state that anything deriving from those ringfenced assets, for example, sale proceeds from an excluded property, are also to be protected.
Nuptial agreements can be very bespoke, depending on the couple’s circumstances. For example, if there is a family business that needs to be considered. That might mean input from corporate law specialists and at Thorntons, we regularly collaborate with colleagues from across the firm to ensure that the Agreement is fit for purpose.
Why get a prenuptial agreement?
For Taylor and Travis, they have each built up considerable wealth prior to getting married and may want to protect that. Even for ordinary people, it is becoming increasingly common for couples to get married later in life and they are therefore more likely to have built up their own wealth. It might be about protecting inherited or gifted wealth; a property that was purchased prior to starting the relationship or even a family business.
We are also often instructed by clients that are entering into a second marriage and wish to ringfence wealth for the benefit of children from a previous relationship.
The hope is that you will never have to rely upon this agreement and will have a long and happy marriage. However, having the agreement in place will give you peace of mind that if circumstances change, you have both thought about and agreed on a fair approach. It is often much easier to do that when the relationship is in a good place, than it is when it has broken down.
What if we don’t have an agreement?
In terms of your assets, the law in Scotland provides that matrimonial property is everything that has been acquired by the parties during the marriage, with the exception of inherited assets or gifts from third parties. On divorce, we are asked to achieve a fair division of the matrimonial property, and the starting point is that a fair division will be an equal one. Complications can arise if either or both parties had assets from before the marriage or inherited assets which they then converted into a matrimonial asset. For example, using inherited funds to buy a property. While there can be arguments made that the party contributing non-matrimonial funds should get credit for that, those arguments are discretionary and it can be a lengthy and expensive issue to resolve.
A nuptial agreement can help to make this process more straightforward as the couple have agreed what is to happen to certain assets in advance.
When should you think about a prenuptial agreement?
We suggest that you should think about, discuss and take legal advice about a prenuptial agreement well in advance of the wedding. It is a busy (and often stressful) time, and it is important that each of you have had time to consider the terms and take independent legal advice. And if you have left it too late, there is the option of a postnuptial agreement.
For advice on pre and post nuptial agreements, contact our Family Law team on 03330 430 150.
