Published Summer 2014
We are often consulted by parents who are worried about the consequences if they give substantial assets to their children and their children subsequently get divorced.
Our family lawyers are experts at advising on the steps you can take to protect your family financially.
Pre-Nuptial Agreements can be useful to help protect assets built up prior to marriage including inherited wealth.
A Pre-Nuptial Agreement can also be used to regulate the ownership of property going forward. You may want a Pre-Nuptial Agreement put in place to protect assets you intend to earmark for your children or other dependents.
Under English law, Pre-Nuptial Agreements are not automatically enforceable. However, if each party enters into the agreement freely and voluntarily, with independent legal advice, such an agreement will be regarded as a relevant factor to consider within subsequent divorce proceedings, when the court considers how the assets should be distributed fairly between the parties.
Recent Law Commission guidance recommends that Pre-Nuptial Agreements which meet certain criteria (‘Qualifying Nuptial Agreements’), should be legally enforceable. It is therefore the case that legally enforceable Pre-Nuptial Agreements may be on the horizon.
Pre-Nuptial Agreements can be used to provide clarity as to what each party intends from the outset. Such an agreement might reduce the cost of legal advice and potential court litigation, should the relationship subsequently break down.
The law affecting unmarried couples differs from the law protecting the rights of married couples or civil partners. Very few think about the legal issues surrounding their living arrangements, and often assume that they are protected by so called “common law marriage” rights, which do not legally exist.
If you or a family member are investing in a property with a partner, it is important to get legal advice at the earliest opportunity. You may be in a situation where you plan to provide more by way of a deposit on purchasing the property, and you wish to protect your extra investment.
You can do so by your family member entering into a Declaration of Trust at the time of purchase, which will mean that the property is owned in distinct percentage shares, rather than equally, as joint tenants.
You should also consider whether a Cohabitation Agreement is appropriate. These are being used more and more to provide clarity for unmarried couples wishing to regulate the terms of their relationship.
An agreement can provide written evidence of what each individual intended at the outset, as to their respective ownership of property, and what they each intend to happen in the future.
Cohabitation Agreements are especially useful for couples who are entering into a new relationship after the collapse of a previous relationship or marriage, or for those who own more assets than their new partner.