Don’t let your heart overrule your head this Valentine’s Day
It is estimated to be the busiest day of the year for marriage proposals, so with Valentine’s Day on the horizon, have you considered how you will protect your wealth and assets if you become engaged?
Around 42% of marriages in England and Wales sadly end in divorce, so it’s important to use your head and protect yourself for all eventualities.
Where a marriage hasn’t yet taken place, then a pre-nuptial agreement should be drafted. This sets out how your assets will be divided after the marriage and it will be unique to each couple. Typically, a prenup focusses on the assets which each person brings to the marriage such as business assets, inheritance, savings and even pets, but it may also include assets acquired during the marriage such as a future inheritance.
Whilst prenups are not yet legally binding, the courts will take them into consideration and there have been a number of court rulings where prenups have been enforced. For a court to take a prenup into account they will be looking to make sure that;
• Both parties had access to and took independent legal advice prior to signing the agreement.
• That both parties had time to consider the document properly and that it was signed at least 28 days before the wedding.
• Both parties provide financial disclosure of their assets and income, so that all parties are aware of what they were signing up to and can be advised accordingly.
If you have already got married but want to protect your assets then a post-nuptial agreement could be entered into, which might help to ringfence certain assets. Again, it is important that both parties have access to independent legal advice before deciding to make an agreement and there is no guarantee that it will be taken into account by a court in the future.
If you are co-habiting with a partner then a cohabitation agreement is recommended which sets out the agreement in the event of a future split. This is especially useful where the ‘bank of mum and dad’, an inheritance or simply your hard work has got you onto the property ladder and you want to protect your investment.
If you are involved in a business and want to protect assets such as property and land and want it to remain within the family, then you should consider using a family trust. As no two families or situations are the same it is recommended that legal advice is taken before any major relationship changes are embarked upon.
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