Pre-Nups: Essential Preparation or Provision for the Worst?

Just as we are advised to make a will, to plan for retirement and to think about various other insurance policies along the way, a pre-nuptial agreement is something that may well be appropriate in certain sets of circumstances, to both protect and to provide in the case of a marriage breakdown. Such agreements tend to be used where there is pre-acquired wealth, trust assets, inheritance prospects or in cases of re-marriage.

While it is most unlikely that one would enter into a marriage expecting that it will end, sadly divorce is not uncommon, and such agreements could be viewed as taking prudent steps to avoid a potentially messy, costly and stressful battle should the marriage end, and to manage expectations before tying the knot. Certainly, pre-nuptial agreements are starting to lose the negative reputation they perhaps once had and they are being viewed more and more as a suitable way to plan ahead, so far as possible, just in case.

There are various pitfalls that one may encounter in trying to negotiate and sign a pre-nuptial agreement, which could then affect its validity.

Before signing a pre-nuptial agreement, both parties will need to take independent legal advice and understand the other’s financial position. There must be no pressure on a party to sign the agreement and timing is key. A draft agreement is not something that should be presented to a future spouse the day before the wedding!

However, a pre-nuptial agreement is not a one-stop solution. It cannot prevent a party from issuing Court proceedings for financial relief and it will not be automatically binding on a Court. Rather, it is one aspect that will be considered by a Court in its broad discretion in determining an appropriate settlement, with the Court having regard to all the circumstances of a case.