How to make a prenuptial agreement

When you marry, your assets become 'matrimonial assets' and unless specifically protected, can be considered for division as part of divorce proceedings. The main purpose of a prenuptial agreement is to limit potential claims on the assets of one of the parties to the marriage, thereby avoiding costly litigation.

At present, prenuptial agreements are not legally binding in England and Wales, however, courts may take them into consideration, as long as certain safeguards are met.

In Scotland, prenuptial agreements are regarded as legally binding provided that they are fair and reasonable at the time they are entered into.

In England and Wales the following safeguards need to be met for a prenuptial agreement to be considered by the courts:

• The prenuptial agreement was made at least 28 days before marriage.
• Each party received legal advice about the prenuptial agreement from the outset.
• Each party made a full and frank disclosure to the other of their financial wealth - no assets were hidden.
• Neither party was under pressure or duress to sign the agreement against their will.
• There has been no significant changes rendering the prenuptial agreement inappropriate (eg the birth of any children, disability of loss of employment).
• The prenuptial agreement is fair and realistic. If the division of assets is weighted too heavily in the favour of one party, it may be judged to be unfair by the courts.
• The prenuptial agreement is reviewed and amended during the course of the marriage, particularly when children are born. This reduces the likelihood of the agreement not being enforced, due to the length of time elapsed since it was first made.

In Scotland the following safeguards need to be met to show that the prenuptial agreement is fair and reasonable:

• Each party must have had sufficient time to fully consider and understand the terms of the prenuptial agreement before entering into it.

• Each party must have been aware of all information necessary to allow them to fully consider and understand the terms of the prenuptial agreement.

• Each party must have received separate and independent legal advice.

• Neither party was under pressure or duress to sign the agreement against their will.

• The prenuptial agreement must either be made well in advance of the wedding or, where the  prenuptial agreement was entered into shortly before the wedding, discussions regarding the prenuptial agreement must have been ongoing for a reasonable period prior to the wedding.

The prenuptial agreement is unlikely to be upheld by the courts if these safeguards are not met.

It is important that each party carefully considers future eventualities, for example:

• one of the parties giving up their career to look after children
• future business ventures together

Each could impact upon the fairness of an agreement made between a couple about to marry.