Advantages of a Pre Nupital Agreement

The advantages to you of entering into a pre-nuptial agreement include:

• Clarity. Parties can make it clear to one another that certain property belongs to you alone and will not be shared during the marriage or on any future divorce. Such property is often referred to by family lawyers as "non-matrimonial property". The definition of non-matrimonial property is unclear in case law, but can be clearly defined in the pre-nuptial agreement so that Parties are aware of the extent of each other's non-matrimonial property and the value of any property you are giving up the rights to share.

  
  

• Certainty. Parties can agree at the outset of your marriage how your finances will be divided if you later separate or divorce. This should save you both the uncertainty, time and stress of litigating about your finances if you do later separate or divorce.

  
  

• Transparency. Parties should provide financial disclosure of your assets and income in the pre-nuptial agreement, so you will both know at the outset of the marriage the value of each other's assets, which will assist you in your negotiations.

  
  

• May save money. While Parties will incur legal fees for preparing and advising on the terms of the pre-nuptial agreement, it is usually much less expensive to negotiate and draft a pre-nuptial agreement than to litigate about the division of your finances should you later separate or divorce.

  
  

• Protection of assets. Parties can protect assets you may wish to "ringfence" from one another, such as inherited assets, family heirlooms, an interest in a family business, gifts received from a third party, or property acquired before the marriage. If the pre-nuptial agreement ringfences such property, the court is less likely to award a share of that property to the other party on any future divorce.

  
  

• Debt protection. If Parties have significant debts, either now or in the future, the pre-nuptial agreement can be used to protect your assets from being used to satisfy those debts. (This will also be the case with any debts you may have now or in the future.)

  
  

• Compensation for loss of career. Parties can agree that if, during the marriage, Parties give up a potentially lucrative career to care for the family, that person should be entitled to a greater share of the assets on the breakdown of the marriage to reflect their loss of earning power going forward. It is often difficult to convince the court to award an element of "compensation" for loss of career, but provision for compensation in the pre-nuptial agreement is likely to be upheld by the court.

  
  

• Protection of family members. Parties have children from a previous relationship OR marriage. A pre-nuptial agreement can protect the financial interests of children from a previous relationship OR marriage by ensuring certain assets are ringfenced for them in the pre-nuptial agreement.

  
  

• Minimises acrimony on divorce. Setting out how assets are to be divided on divorce in the pre-nuptial agreement should lead to fewer arguments about finances should you later divorce and result in a more amicable relationship between you.

  
  

• Improves communication. Discussing financial issues can be one of the most difficult aspects of marriage. Dealing with this at the outset of the marriage can strengthen a relationship and support good communication in the marriage.

  
  

• Protection of business partners. Parties have OR has an interest in a family OR small private business. The pre-nuptial agreement can protect that interest and prevent disruption to the business if the marriage breaks down in the future. This could prevent a situation whereby Parties awarded an interest in the business and has OR have to participate in its running with family members or business partners.

  
  

• Provision on death. The pre-nuptial agreement can set out what you wish to happen to your assets on your death. This can support the provision contained in your will and clarify what should happen to certain assets. For example, the inheritance prospects of children and grandchildren can be protected in the agreement.

  
  

• Freedom to agree your own terms. Parties may have a creative plan for dividing your assets if you divorce. A pre-nuptial agreement provides you with the freedom to agree your own terms without the court imposing a solution on you.