Marriage is undoubtedly a time for celebration. However, sadly, some 42% of marriages will end in divorce.
There has been a significant uplift in the number of pre-nuptial agreements over the last few years following the seminal case of Radmacher -v- Granatino. Put simply, that case strengthened the legal weight of pre-nuptial agreements and established the following principle:
Pre-nuptial agreements that are entered into freely and with a full understanding of the implications are to be given effect unless it would be unfair to hold the parties to it.
Recent research by Investec Investment & Wealth (see article below) has found that "almost a third of parents are unwilling to provide their married children with financial aid or an inheritance because they are afraid divorce will result in the money leaving the family". Crucially, pre-nuptial agreements can provide protection, should the marriage subsequently break down.
It is not just individuals who may bear the brunt of a marital breakdown. Do not forget that divorce has the potential to wreak havoc for the family business. With a pre-nuptial agreement, it is possible to ring-fence family wealth and inheritance and protect those assets from divorce claims further down the line.
Whilst they may seem unromantic, pre-nuptial agreements should be an essential part of an individual’s or Trustees’ financial planning.
As trusted advisers, we consider that pre-nuptial agreements should be a critical consideration for our clients wishing to preserve their wealth and, where appropriate, will suggest that they have a discussion with a family solicitor about a pre (or post)-nuptial agreement.
...with divorce rates as they are in the UK, we are seeing increasing numbers of parents looking to protect wealth from leaving the immediate family, particularly if they’re pessimistic about the state of their children’s marriages