Pre-nuptial agreements (“Pre-Nups”) are no longer the preserve of the rich and famous. They have lost their social stigma and are becoming almost as common as the obligatory #Engaged selfie.
It has been well over a decade since the seminal case of Radmacher v Granatino which changed the English legal landscape on Pre-Nups forever. Today, if your Pre-Nup is procedurally and substantially fair the advice is – if you sign it – expect to be stuck with it.
The rise and rise of Pre-Nups
The Marriage Foundation published research in 2021 which found that a whopping one in five weddings now starts with a Pre Nup and family law practitioners are certainly seeing more agreements cropping up in litigation at the end of marriages. But who is getting them and why?
The study underlying the Marriage Foundation paper had some interesting, and sometimes surprising, findings:
- Pre-Nups are more prevalent with high earners, 44% of those in the higher incomes group (higher managers and professionals) surveyed had entered into one.
- Pre-nups are statistically more likely for couples where the earnings are similar or where the wife earns more than the husband.
- Couples who had undertaken some kind of marriage preparation (e.g. a course or mentoring) are significantly more likely to enter into one (64% of the total group surveyed, and almost 80% of the higher earners, had a Pre-Nup if they had also done marriage preparation).
It is no surprise that higher earning couples are more likely to get Pre-Nups. They tend to: (i) have more to lose upon divorce and therefore have a greater incentive to take steps to protect their wealth; (ii) be more financially savvy; and (iii) have the funds to pay for divorce lawyers to draw up and negotiate the contracts.
Couples where both are earning well and where each person can look after their own income needs may well feel that a bespoke Pre-Nup, which reflects the reality of their relationship, is more suitable than the default one-size-fits-all English legal system. If you have “gone Dutch” throughout your relationship with each paying their own way even in marriage, why should this change upon divorce?
The link between marriage preparation and Pre-Nups is the most significant and hardest to explain. It may be a simple case of those who are organised enough to undergo marriage classes are also more likely to financially plan or to have taken the time to educate themselves on the financial implications of divorce (most people are blissfully unaware of the huge financial rights and responsibilities bestowed upon people when they marry). Let’s hope the link is not just because these couples have been forced to reflect on their relationships and are less sure of their longevity as a result…
Are they unromantic?
Perhaps most interestingly, and reassuringly for clients, the Marriage Foundation study did not find a link between Pre-Nups and divorce. The conclusion of the research was that Pre-Nups did not change the risk of a marriage ending in divorce.
It seems that the “un-romantic” label Pre-Nups have historically been branded with may not be warranted. Before the marriage they can provide comfort to the financially stronger party that their partner is not with them for their money and negotiating Pre-Nups can led to sensible and open discussions about finances generally and how a couple wants to run their lives during the marriage, not just how to divide things up at the end. Couples who divorce with a Pre-Nup also often have a simpler and less acrimonious experience because the finances have already been dealt with. This saves time and money in the long run and anything that can take the heat out of separation, especially where there are children involved, has to be a good thing.
So should you get one?
If you are in a relationship and want to protect your assets from financial claims from your partner, the best advice remains – don’t get married! The next best option is to get a Pre-Nup. Whilst the last thing any couple needs is more Wedmin, divorce lawyers are now so used to doing them that they are not difficult or costly to put in place. They are significantly cheaper than most other elements of today’s weddings and often turn out to be a better long-term investment.