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. You can use Rocket Lawyer’s independent legal advice service for prenuptial agreements to meet this requirement.
• Each party made 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 have been no significant changes rendering the prenuptial agreement inappropriate (eg the birth of any children, disability or 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.

Prenuptial agreements should set out where each person is habitually resident and domiciled.

Habitual residence

Somebody’s habitual residence is the country where they live regularly. Examples of a habitual residence include: 

• the country in which you have lived all your life (eg England), even if you go on holiday to another country for a few months 

• a country you move to for a set period of time because of your job 

• the country you move to, even if you have only been there a few days, if you intend to live there for a longer period of time 

It’s important to note that habitual residence is not lost by someone’s temporary absence (eg because of working abroad or studying abroad), provided that the absence is not inconsistent with their habitual residence in that country.

Domicile

Domicile is harder to define than habitual residence. In essence, someone is domiciled in a country if they have close ties to it. A country of domicile is the country in which someone has voluntarily chosen to live, with the intention of making it their permanent home. 

Someone can only have one domicile at a time and it will either be: 

• a domicile of origin - this is the domicile someone automatically acquires when they are born and will often be the country in which their father was domiciled at the time of birth. Most people’s domicile of origin will be their country of birth

• a domicile of choice - this is the country someone moves to with the intention of making it their permanent home (until or unless something changes their mind) 

A person’s domicile of origin is never fully lost, but it can be suspended by a domicile of choice. For example, if someone is born in Australia to Australian parents and they live there throughout their life until they graduate from university, their domicile of origin would be Australia. If they then move to England, with the intention of living there permanently, their new domicile (ie their domicile of choice) will be England.

How are habitual residence and domicile established?

Each partner will need to consider a variety of factors, including: 

• nationalities

• where they normally live, work, study and spend their free time 

• whether any moves abroad are temporary or permanent in nature 

  • if either party moves abroad, whether they indent to move their affairs abroad as well

  • if either party moves abroad, whether they kept their properties and/or furniture (even if rented out) 

• where cars are registered 

• mail addresses 

• where either party’s presence is registered (eg where they are registered to vote and go to the GP) 

• if phone numbers are UK numbers or foreign numbers 

• where either party’s financial arrangements (eg bank accounts, accountants or tax statuses) are based

For more information or for help working out your habitual residence or domicile, Ask a lawyer.

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.