One of the most common questions divorce solicitor, Paul Jordan, is asked about is how to protect your assets when getting married. In this brief article Paul looks at some of the strategies that can be used. If you would like Paul to review your own personal circumstances and advise you on your options for a fixed fee, then give him a call on 0808 139 1606 or email him at [email protected]
The reality is that if you are getting married then you cannot guarantee that any pre-marriage assets will be ring-fenced or protected on divorce. Pre-Nuptial Agreements (also known as Pre-Marriage Contracts) can sometimes prove helpful in persuading the Court on divorce that a pre-marriage asset should not be dealt with in the same way as assets acquired during the marriage, but contrary to popular belief these are not automatically followed.
Are Pre-Nuptial Agreements binding on divorce?
English Courts do not currently recognise Pre-Nuptial Agreements as being binding upon their discretion. Following a divorce, Judges are required to take into account all the circumstances when making any decision about marital finances. This can of course include any agreement drawn up prior to the marriage. When a Court analyses whether or not a Pre-Nuptial Agreement should be upheld all sorts of factors become relevant, in the same way as if the Court is asked to uphold any other form of contract. If there is no paperwork, an imbalance of ‘bargaining power’, an absence of consideration or no intention to create legal relations for example (all of which often exist in a pre-marital situation) then the Court may be reluctant to take the agreement into account.
Accordingly, you need to think of all the possible negative arguments that could be raised to prevent the pre-nuptial agreement being upheld. The following are imperative:
- that the Pre-Nuptial Agreement is documented in plain and unambiguous language;
- that there has been a proper disclosure of relevant financial information; and
- that both parties have had the opportunity to take and consider independent legal advice without any time or other pressures and preferably with the legal advice certifying that they have given such advice or that the document is prepared and signed without any time or other pressures.
If you require guidance on how to protect your assets when getting married by making a Pre-Nuptial Agreement then call us on 0808 139 1606.
Could I put my assets into a trust?
It is often the case that on divorce one of the spouses will consider moving their assets around in a way that might not find favour with the Court. Intentional dissipation of assets by one spouse at the time of divorce can result in the Court making an unfavourable decision against the spouse who has dissipated the assets. This can range from selling a car at an undervalue to a relative or placing millions of pounds in an offshore trust. It is not advisable to try and place funds beyond the reach of the Court by artificially rearranging your finances by selling off assets to friends or family at an undervalue or by placing money in an offshore trust.
However, the position can be different for assets that are placed in trust prior to marriage.
Should my parents consider changing their Wills to exclude me as a beneficiary?
It may well be that you and your spouse are named as beneficiaries in your parent’s Will. If you are separating or getting divorced, then it is highly likely that your parents will not want to continue to benefit your estranged spouse. You should therefore recommend to your parents that they consider changing their Wills. Your parents might also wish to consider excluding you from their Will as inherited money would be a resource of yours that could be taken in to account by the Court.
Consideration can also be given by parents to ‘skipping a generation’ by naming any children you have as beneficiaries, rather than you. This will ensure that those assets never form part of your finances and will therefore not be subject to the court’s jurisdiction on divorce. This can be a particularly useful strategy in second marriage scenarios.
Can my estranged or ex-spouse make a claim against any money I inherit?
The simple answer is yes. If you have received an inheritance then it becomes a resource which a Court can take into account. However, the Court will treat inherited money differently to money which has been built up during the marriage. So when considering how to protect your assets when getting married it is worth thinking about your inheritance position.
How we can help
If you require guidance on how to protect your assets when getting married then call Paul Jordan on 0808 139 1606 or send him an email at [email protected]