Cash clinic: So prenups have power in England … what about here?

Q I am a 45-year-old man and am getting married next year. I run my own business, have built up a good amount of assets and own a home in Edinburgh as well as a holiday flat in Spain.

I know it's not particularly romantic, but the coverage of English courts upholding a foreign prenuptial agreement has really got me thinking. I am now considering having a prenuptial agreement drafted in advance of my own marriage but I am not sure what should be done.

What are the requirements? What kind of information should be included? I obviously hope I never have to use the agreement but recognise the need to protect myself should my wife to be and I separate in the future.

AF, Dunkeld

Hide Ad
Hide Ad

A The issue of prenuptial agreements has been given a lot of attention following the recent decision in the Radmacher v Granatino case in the UK Supreme Court.

In this case the English legal system recognised the importance of a prenup and took into account the terms of that agreement in overturning a previous divorce settlement. This decision has made headlines as until this case the strength of prenups in England and Wales was questionable.

It should be noted that the approach of Scots law to prenups is different to that in England and Wales.

Prenup agreements have not yet been tested to the same extent by the Scottish Courts. They are, however, largely viewed to be binding subject to three main conditions:

• They are fair and reasonable having regard to the circumstances of the parties

• Both have had the opportunity to receive independent legal advice

• There is no pressure on either party to sign the agreement.

The effect or importance of prenup agreements has to be seen against the differing context of how English and Scots Law deal with the separation of assets on divorce.

Hide Ad
Hide Ad

In Scotland any property acquired before the date of marriage would not normally be considered to be matrimonial property able to be divided between the parties on divorce. I note that the property and assets you are seeking to protect have been acquired before marriage and would accordingly normally be excluded from any division of assets on divorce.

But a prenuptial agreement can be useful in circumstances where the nature of assets may change during the course of the marriage, as this could mean they may fall into the pot of matrimonial property. An example of this would be if you transferred your home into the joint names of you or your spouse. Another example could be the issue of additional shares within your business. Such events could change non-matrimonial assets into matrimonial property.

A prenuptial agreement is really just a contract that can provide some degree of certainty and control over your financial arrangements and remove the wide discretion that the Scottish Courts have to deal with such matters.

• Shona Templeton is a partner and accredited specialist in family law at HBJ Gateley Wareing

• If you have a question, write to Jeff Salway, Personal Finance Editor, The Scotsman, 108 Holyrood Road, Edinburgh EH8 8AS or e-mail: [email protected] The above is for general purposes only and is not tailored for individual use. It does not constitute legal, financial or investment advice on any particular matter and must not be treated as a substitute for specific advice. No action should be taken in reliance of the information given. The Scotsman Publications Ltd and HBJ Gateley Wareing accept no liability on the basis of this article.