A pre-nup could protect your home.
It may not sound romantic, but a pre-nuptial agreement could help to save a lot of headaches about your home. Family law specialist Sarah Crilly explains.
STATISTICS tell us that nearly 50% of marriages end in divorce. On average, a marriage in Britain lasts only 11 years. For second marriages, these tend to end within the first five years.
Nearly two-thirds of those divorces end with the family wealth evenly split between husband and wife. Equality has become the guiding principle for settlement, even more so where there are significant assets involved.
Property assets tend to form the majority of a couple's greatest capital. Most tend to be acquired jointly and comprise the matrimonial home so an equal split of any equity may be the norm unless one party's needs dictate there should be an unequal split.
However, if you are embarking on marriage for the first or even second time and have either inherited or been gifted property from family members or simply have acquired your own property portfolio before meeting your spouse, consideration should be given to what you wish to happen if you later divorced.
While these types of property would be classed as non-matrimonial assets, it does not give a party complete protection. Such assets are not automatically ring-fenced. The only way of affording yourself any protection is to enter into a pre-nuptial agreement, a contract by a couple prior to marriage which sets out how they intend to regulate their financial positions in the event of a divorce.
Rather than leave the division to the court, a pre-nuptial agreement will give the parties certainty and is a sensible form of wealth protection. It will also reduce legal fees as the issues for the court will be clearer and narrower. The average cost of ending a marriage through the courts is PS13,100 and that tends to be the small asset cases.
Although not automatically binding on the court, provided it is entered in to fairly, both parties have had the opportunity to consult a lawyer before signing it and there is no injustice if the pre-nuptial agreement is followed, the Supreme Court has ruled that they should be upheld and only departed from in limited circumstances.
Pre-nuptial agreements benefit anyone with assets that need to be divided after a divorce. Of course, there are cases where one or both parties are in business and this can bring additional complexities or their affairs may be tied up with a trust or farm, but all couples can benefit from a pre-nuptial agreement.
Couples end up in court on some uncomplicated cases where they may just be arguing over the split of equity in a house. They still have to fund the costs of the proceedings and the stresses of litigation are the same.
Sarah Crilly is an associate in the family and matrimonial team at Ward Hadaway law firm in Newcastle, email firstname.lastname@example.org or tel: 0191 204 4463.