8 Things You Should Include in Your Pre-Nuptial Agreements

8 Things You Should Include in Your Pre-Nuptial Agreements

Getting married is a fun and exciting time for all involved. But, before you do, there are some important formalities to sort out. Read on to find out what should you include in your pre-nuptial agreements…

Pre-nuptial agreements are increasing in popularity in the UK and the US. While no marriage starts with the means to separate, with over one in three marriages ending in divorce in the UK, it’s a wise idea to enter a prenuptial agreement with your partner.

But what is a prenup and why do you need one? Don’t worry if you have never had nuptial agreements explained to you before – you’re in the right place. In this post, we’ll discuss the ins and outs of a prenuptial agreement and suggest what you should include.

What is Prenup?

In the UK, a prenuptial agreement – also known as a ‘prenup’ – is an agreement between two individuals, that are in a relationship, that sets out how assets should be divided in the event of a divorce.

The legal documentation is signed before the start of a marriage and sets out a couple’s rights regarding assets such as property, pension, bonds, and their dependent children. Both individual and joint assets such be included in a prenup to outline how everything is divided, should a break-up occur.

What Should You Include in a Prenup?

1. Property

Nowadays, due to rising house prices, many people’s wealth is invested in property, so it’s important that it is one of the first things you include in your prenup. You should include all property that you’ve acquired together, or separately, before your marriage.

If you have bought a property together, it’s important to detail what will happen to the family home in the event of a divorce. You will naturally want to safeguard the property – particularly if you received it in inheritance or have a family to look after.

2. Business

Another important asset that you should include is any business venture. The division of a business can be problematic if you both have shares in the company, or one person in the relationship relies on the other as a main source of income. Therefore, it’s a good idea to formally agree on the arrangement before entering a marriage.

You should agree on who will take control of the business, succession planning, how the debts – if you have any – are to be divided, and whether you’ll pass down the business to anyone else.

3. Income

Similarly, any other sort of income should be declared in your pre-nuptial agreement. This could be any part-time work you take on or another small business venture that you’ve started.

Try to detail as much as you can about what your income comes from, so nothing is missed out. This could also include income from your pension or inheritance, but we’ll talk about that below.

4. Pension

If you receive a pension, this will be considered as income. Usually, when you receive a pension, it means that you’re retired, meaning it’s even more important to get your affairs in order if you’re relying on a pension as your main source of income. 

What’s more, some professions get a much better pension than others. If you work in the public sector, and your partner works in the private sector, you’ll likely receive a far better state pension, so you might not want to share it equally.

5. Inheritance

With inheritance tax in the UK standing at a whopping 40 percent, it should be something you include in all legal documents – such as your will and prenuptial agreement.

Most inheritance is intended for dependants, so declaring your inheritance amount and where you’d like it to go, is imperative in safeguarding your children. The last thing you want after a messy divorce is for a chunk of your inheritance to be taken from you.

6. Bonds

Premium Bonds are investment opportunities that are entered into a monthly prize draw where you can win between £25 and £1 million tax-free. With the luck of the draw paying off for many individuals in the UK, it’s another thing you should consider including in your prenup.

7. Debt

It’s not just income and assets that you should include in your prenuptial agreements; any debt that you owe should also be declared. Sometimes, couples aren’t honest about their personal debt, and this can cause several problems if a divorce does take place. Try to be as open and honest with your partner to ensure neither of you gets a nasty surprise.

8. Savings

Unfortunately, divorces are expensive, and you’ll likely have to dip into your savings to help you out.

So, whether your savings are little, or you’ve been building them up for a while, they’re something that you’ll want to factor into your prenup. No matter what you’re saving for, or who you intend your savings to go to, they often serve as a huge asset for individuals.

Are You Considering Entering a Pre-Nuptial Agreement Before Your Marriage?

In this article, we’ve explained what pre-nuptial agreements are, as well as detailing what you should include to safeguard yourself and any dependants. Though pre-nuptial agreements can be difficult to discuss with your partner at first, it is a pragmatic and sensible thing to sort out before your big day.

Do you think we’ve missed any factors that should be included? If so, let us know in the comments below!

Please be advised that this article is for general informational purposes only, and should not be used as a substitute for advice from a trained legal professional. Be sure to consult a legal professional or solicitor if you’re seeking advice regarding a prenuptial agreement. We are not liable for risks or issues associated with using or acting upon the information on this site.

Guest Article.