How To Consider Making a Prenuptial/Cohabitation Agreement
Often in the news where celebrity couples are concerned, prenuptial and cohabitation agreements are not as legally cut and dried as they may seem. Unlike prenuptial agreements for married couple, cohabitation agreements are recognised by the courts in England and Wales as being legally binding. It is not, however, currently established that prenuptial agreements for married couples are binding in the courts, according to a leading family lawyer. Here are a few points to ponder:
What you'll need:
A full list of all personal assets
It is not unreasonable for someone to wish to protect their own personal assets that were accrued before the relationship began, especially in the case of a highly successful and lucrative career, inherited property or family business.
Faced with the fact that more than one in three marriages finish in the divorce courts, it is becoming increasingly obvious that financial agreements of this nature are necessary.
Cohabitation agreements are a growing trend among those in the 30-44 age group, largely because these are the people who are more likely to have established a sound financial lifestyle prior to the start of a relationship.
Although critics (usually female) claim that prenups are the kiss of death to a marriage, those who contemplate this for the second time should seriously consider their position before tying the knot. With the statistics for second marriages being no better than the life expectancy of the first, it is in everyone’s best interests to apply a bit of common sense, says The Good Divorce Guide by Suzanne Ruthven.
Some financial advisors are going so far as to claim that if the law is to insist that all assets are split down the middle in the event of divorce, then you might as well run your own personal investments that way from day one of the marriage.
Where it is necessary to protect assets gained from a first marriage and to ensure that any children do not loose out in the event of a second marriage breaking up, a pre-nup is an ideal solution.
Where a wealthy person remarries someone with considerably fewer financial resources, and wants to protect their assets for any children of a first marriage, some formal agreement would solve any long-term problems.
Providing there has been a full disclosure of assets before any pre-nup or cohabitation agreement is signed, and both parties have separate legal representation, courts are less likely to over turn the arrangement, especially where it safeguards the interests of children.
Before making any arrangements, draw up a full list of all personal assets accrued prior to the start of the relationship – this should also include any family heirlooms, jewellery, investments, collections, paintings, antiques, etc., that have a monetary value.
Each of you should consult a solicitor experienced in Family Law as legal proceedings can often be complex and uncertain, so you will need a solicitor to draw up and deal with the paperwork. Your own solicitor will make sure you are not signing away anything you may regret at a later date.
According to the Office for National Statistics, the proportion of unmarried men and women living together has doubled during the past 25 years to about one in eight of the adult population. Providing that you are both in agreement that any pre-nup or cohabitation agreement is fair and above board, then go ahead and discuss it more fully with your respective solicitors.
Despite the urban myth that living together for two years automatically qualifies for the same rights as a married couple, a live-in partner does not have an automatic right to inherit their partner’s assets.