Everything to Know About Prenups
In an ideal scenario, nobody would enter a marriage while simultaneously preparing for a divorce. Yet the reality is that life gets messy. People change, motives reveal, and all too soon, a loved-up couple can suddenly find themselves at the centre of a whirlwind settlement. Is a prenup right for you both?
Everyone knows the familiar statistic: roughly 40% of marriages are thought to end in divorce. According to experts, that figure remains correct; ⅖ of UK marriages ended in separation in 2024.
As much as you love your partner, it’s always better to be prepared. Here’s everything you should know about prenups.
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What is a Prenup?
Let’s address this mysterious agreement head-on: a ‘prenup’ is a shortened phrase for a prenuptial agreement. This is a contractual agreement that both couples sign before entering a civil partnership or marriage. By signing, both parties agree on a specific division of assets and financial responsibilities should they separate.
A good example of a scenario that would warrant a prenup is when one party owns a business. A prenup helps to protect your company in case of divorce. It is also wise when one party has significantly larger capital than the other.
Many cite the case of Katrin Radmacher vs Nicolas Granatino as a turning point for prenups. In 2010, the Supreme Court reduced Granatino’s divorce settlement amount on the basis that the couple had signed a prenup beforehand.
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Legal Status of Prenups in the UK
The legal status of UK prenups is a grey area. Technically speaking, these contracts are not legally binding. However, UK courts will consider the agreement when allocating financial settlements.
For instance, take the Radmacher vs Granatino case. Radmacher’s former husband still received £1 million of her perceived £100 million capital (despite the prenup resulting in the court reducing the settlement from £5 million). The fact that both parties had knowingly and voluntarily entered the agreement resulted in a significant reduction of Granatino’s settlement.
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Benefits of Having a Prenup
A prenup is a safety net rather than a complete guarantee. But it does come with significant benefits, including:
- Clear financial agreements to streamline an emotionally, financially, and logistically challenging divorce process
- The partial or complete protection of individual assets
- Peace of mind for those entering second marriages with children from previous relationships
Before finalising a marriage or civil partnership, seek legal advice from specialist solicitors who can assist in reaching fair and comprehensive prenuptial agreements.
Already attended the big day? Or have you undergone significant changes like the birth of children or larger capital post-marriage? Adjust your prenup or consider a postnup (post-nuptial agreement), which achieves similar benefits.
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Considerations Before Signing a Prenup
Approaching a prenup correctly is vital. Fairness and comprehensiveness are big considerations, but the contract must also be polished enough to withstand potential future scrutiny. In other words, a court is less likely to uphold an unrealistic agreement – don’t leave yourselves vulnerable to future overruling.
Consider factors like:
- Full financial disclosure
- Demonstrable access to independent legal advice
- No prejudicial treatment of any children
Prenups might be a beneficial foundation to invest in before a union. Enlist expert assistance along the way and operate from a place of compassion and financial caution.
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