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Background

Wealth Protection

Protecting your assets is important especially when entering a new relationship or when taking the next step. We offer the following options to help preserve/protect your assets and inheritance prospects, ensuring you and your family have a secure future:

Pre-nuptial and Post-nuptial agreements

A pre-nuptial agreement is an agreement between a couple entered into prior to a marriage that seeks to regulate what they intend to happen to their financial affairs if the marriage were to end. (Pre-nups for civil partnerships are referred to as pre-civil partnership agreements).

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Historically pre-nups have carried a stigma for being only for the rich and famous, however they are now rising in popularity.

In England and Wales pre-nups are currently not formally binding in the event of a later divorce. However, provided key criteria are met, a pre-nup is likely to be followed by a court. Therefore, to give it the best possible chance of achieving its purpose it should be:

  • Procedurally and substantively fair - it cannot be obviously unfair to either party
  • Freely entered into and made by deed
  • Made at least 28 days before the wedding (preferably far in advance of it)
  • Both parties must have received disclosure of the other party’s financial circumstances
  • Both parties must have received independent legal advice, with it recorded they understood the agreement
  • The agreement should meet the needs of the couple and their children (such as future housing needs and income needs).

A post-nup can be put into place after marriage.

Whether you are about to get married or have already tied the knot these agreements are worth exploring. Perhaps a difficult topic of conversation to have with your loved one, it can often promote healthy communications about finances from the start of your journey together.

There are many reasons why a pre/post-nuptial agreement may be beneficial, including:

  • To preserve assets for children from a previous relationship
  • Protection of money/assets that have been inherited
  • For clarity over finances if the relationship were to end
  • To ensure you retain control of a business
  • To avoid being liable for your partner’s debt
  • To protect farming partnerships

Pre-civil partnership agreements

A pre-civil partnership agreement is an agreement drawn up by a couple before a civil partnership outlining what would happen to their financial affairs if the relationship were to end.

More info

For more information contact Matthew on 01633 413500 or matthew.wells@rdplaw.co.uk

Cohabitation agreements

Also known as a living together agreement, a cohabitation agreement is a written contract drawn up by an unmarried couple who are living together outlining what would happen to their financial affairs if the relationship were to end. The agreement can be made at any time, whether at the start of them moving in together or after many years of them living together.

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Calls for a change in the law to provide certain protections for unmarried couples, such as the excellent campaign by Resolution – first for family law (www.resolution.org.uk/cohabitation/), unfortunately seem unlikely to bring about legislative change anytime soon. Therefore, an expertly drafted cohabitation agreement can mean that upon separation, potentially expensive and protracted disputes are avoided (or at the very least minimised) and they can give a couple some certainty and peace of mind that each party will be treated in accordance with the terms of a carefully negotiated agreement.

A cohabitation agreement is a written contract which will cover things such as:

  • What financial arrangements the parties have decided to implement whilst living together (e.g. how each person will contribute to household outgoings such as rent/mortgage, utility bills etc).
  • Who owns what assets and property at the time the agreement is entered into, and in what proportions.
  • What each party’s debts are (e.g. credit card/loan liabilities and finance agreements) at the time the agreement is entered into and whether they are the sole liabilities of one party or whether they are joint debts.
  • Whether any gift, inheritance or unexpected good fortune (such as a lottery win) received by either party should remain the separate property of that party upon separation.
  • Pension and death-in-service benefits – some pensions may give the opportunity to make provision for a cohabitant partner via pension benefit nominations, also death-in-service benefits nominations can be covered.
  • How property, assets, and personal possessions should be divided and how joint debts and bank accounts are to be dealt with in the event the relationship breaks down.
  • Potential major life events/changes such as the death of a party, a party becoming ill, and the needs of any future children of the relationship.
  • Who will take ownership of any pets acquired during the relationship upon separation.

A cohabitation agreement is likely to be followed by the court as a legally binding contract provided key criteria are met, including:

  • both parties entering into it freely and voluntarily, with it recorded that they intend for it to be legally binding on them;
  • it needs to be in the form of a deed signed by both parties and witnessed;
  • both parties receiving independent legal advice; and
  • both parties disclosing to each other their respective financial positions and other relevant circumstances

Cohabitation agreements should be made in addition to a declaration of trust regarding property ownership and the parties should also consider taking out life insurance and having Wills drafted.

As with any contract a court may set aside a cohabitation agreement and not uphold its terms in circumstances where there has been fraud, misrepresentation, undue influence or duress.

It is important to note that unlike the financial arrangements for the parties covered in a cohabitation agreement, arrangements recorded in such an agreement for children will not be binding and cannot be enforced as contractual terms. Regardless of any arrangements for children recorded in a cohabitation agreement it is always open for a parent to make a claim for financial provision for their child against the other parent under Schedule 1 of the Children Act 1989 or for child maintenance via the Child Maintenance Service against a non-resident parent.

Many couples find the process of negotiating a cohabitation agreement gives them a chance to carefully consider and discuss how living together is going to be implemented both financially and on a practical day to day level by them, which significantly reduces the risk of arguments about money, property and emotive topics such as the ownership of cherished pets in the future.

Matthew Wells and the Family team are here to help if you are looking to explore cohabitation agreements, would like advice regarding the law on unmarried couples, or issues concerning arrangements for children. For more information call 01633413500 or email matthew.wells@rdplaw.co.uk

Contractual licenses

(Unmarried couples moving in together in a property owned by only one of them)

In some circumstances, for example where a unmarried couple without complex financial circumstances decide to move in together and reside in a property owned by only one of them, a cost-effective and proportionate approach to setting out what is to happen if the relationship comes to an end is to consider entering into a Contractual licence.

More info

A Contractual licence is a formal written contract outlining the basis upon which the non-owning party can live in the property, but upon separation (and the licence being brought to an end, “revoked” or “terminated”) it sets out a timescale upon which the non-owning party must vacate the property and it clearly sets out that the non-owning party regardless of any contributions towards living and accommodation expenses does not acquire any legal or beneficial interest in the property.

Matthew Wells and the RDP Family team can advise as to whether a Contractual licence or a more detailed Cohabitation agreement would be most appropriate depending on a particular unmarried couples’ circumstances. For more information call 01633 413500 or email matthew.wells@rdplaw.co.uk


To arrange a meeting or simply get some advice, contact our Family team today on 01633 413500 or matthew.wells@rdplaw.co.uk

Matthew Wells

Partner

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