Family Law Solicitors Guide to Gifted Deposits And How to Protect Them
Our family law solicitors encounter several situations in which parents, grandparents, or extended family help a loved one with a deposit for a first or new family home.
In this article, our family law solicitors offer guidance on how to protect a gifted deposit.
For expert advice call our team of specialist divorce and estate planning lawyers or complete our online enquiry form.
What is a gifted deposit?
A gifted deposit is where a friend or family member provides all or part of the deposit for the home you are buying. It may be your first home, relocating or upsizing with the arrival of children or trying to get back to home ownership after a separation or divorce.
An alternative to a gifted deposit is a family loan. A loan agreement can state whether interest is payable and either give a specific repayment date or state that the loan must be repaid when the property is sold.
Gifted deposit or family loan?
A home buyer needs to know if they are receiving a gift or loan because of the mortgage and tax implications.
If you are buying with a mortgage, the mortgage company may not agree to lend you the amount required unless the deposit monies are gifted rather than lent. Some mortgage providers are happy to lend if your family or a friend is providing the deposit so long as the family money is protected by a second charge that ranks behind the mortgage provided by the mortgage lender.
If extended family are giving you money as part of their estate planning and inheritance tax strategy the plan will not work unless the money is gifted rather than loaned. There may also be tax implications under current inheritance tax rules if the family member dies within seven years of giving you the money.
If money is given, rather than lent, the giver does not retain any control over the money once it has left their hands. The extended family cannot legally insist the money is returned if they later find that they need extra cash or if there is a family fallout.
These are considerations to be discussed with your family with the help of an estate planning solicitor.
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Who is the recipient of the deposit gift?
If you are buying a house with a partner, fiancée, husband or wife you need to know if the gifted deposit is a joint gift or not.
Whether the gift is joint or not you need a relationship agreement if you are buying a property jointly with a partner. The type of agreement you need depends on your relationship status:
Unmarried – a cohabitation agreement
Engaged to be married or to enter a civil partnership – a prenuptial agreement
Married – a postnuptial agreement
In a civil partnership – a civil partnership agreement
The agreement is between you and your partner and should record whether the gift is a joint one or not and what happens to the family home and the equity if you split up. What’s fair will depend on your financial and personal situation. For example, your family may have provided the gifted deposit but as your partner earns more than you, they will be paying a greater share of the mortgage payments. For example, both your families are gifting you money for the deposit but in unequal amounts.
A family law solicitor can help you work out what should go in your relationship agreement so that it feels fair to both of you and gives you both peace of mind. In addition, it should give your family confidence that you are respecting their deposited gift and sensibly protecting their family money.
If your circumstances change the relationship agreement can be reviewed and changed. For example, you may decide to get married, to have children or to extend the property. Any significant life event could prompt a review.
Gifted deposits and divorce
If you are buying a property on your own after a divorce with a gifted deposit you need:
A financial court order (preferably a clean break) order with your ex-spouse
A relationship agreement if you go on to form a new relationship and your new partner spends time at your property even if their name is not on the title deeds or mortgage
Does a relationship agreement protect a gifted deposit?
Legal & General has carried out some research on trends in family gifting. 57% of mortgaged buyers buying a first home in 2020 received financial help from their parents or family members. By 2024, around 335,000 property purchases proceeded with the help of family money. With the significant rise in property prices and gifted deposits, it isn’t surprising that parents, grandparents and extended family want to know if relationship agreements work and if their gifted deposit is protected or is shared with your partner or spouse if you split up after buying the house.
The answer to whether a relationship agreement works depends on a few factors:
The status of your relationship – if you are unmarried a cohabitation agreement is binding providing safeguards are met. If you are engaged to marry or married a prenuptial agreement or postnuptial agreement will carry weight in any future divorce provided the terms are fair and meet reasonable needs and safeguards when drawing up the agreement were met
How the agreement was drawn up
What the agreement says
Speaking to a family law solicitor will help you understand the safeguards a cohabitation agreement or prenuptial agreement offers to both you and the family member gifting the money to you.
It is best to talk to a family law solicitor before you talk to your partner about a relationship agreement. That’s because your solicitor will discuss a range of options of what goes in the agreement and how best to protect the gifted deposit. It is therefore wise to understand those options rather than have one fixed idea of what your agreement should say from one discussion with your spouse or partner.
Our friendly family lawyers aim to provide a relationship agreement solution so your parents, grandparents, extended family or friend feels confident in gifting you money to buy a property whilst protecting your interests and providing a fair and equitable agreement between you and your partner.
For expert advice call our team of specialist divorce and estate planning lawyers or complete our online enquiry form.
Chris Strogen
Oct 15, 2024
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6 minute read
Clean Break Orders
Divorce
Divorce & Financial Disclosure
Financial Orders
Financial Settlement
Post Nuptial Agreements
Pre Nuptial Agreements
How to Divorce Your Wife and Keep Everything
Our family law solicitors are asked if it is possible to divorce your wife and keep everything. In this blog, we explain your options if you want to keep all the assets after your separation.
For expert advice call our team of specialist divorce lawyers or complete our online enquiry form.
Can a husband divorce his wife and keep everything?
It is technically possible for a husband to divorce his wife and keep everything but most divorce solicitors will tell you that it is an unlikely outcome in financial settlement negotiations or financial court proceedings unless your circumstances are unusual.
If you are a husband your best bet to keep all your assets after a separation or divorce is to sign a prenuptial agreement before your marriage or a postnuptial agreement after your marriage. Even if a wife has signed a prenuptial or postnuptial agreement the document is not legally binding on a spouse under English law. The agreement will carry weight provided both husband and wife took independent legal advice on the contents of the agreement and there was no coercion to sign the document and completion of the paperwork only took place after husband and wife disclosed their assets.
If these safeguards were not put in place the court may disregard the terms of the prenuptial or postnuptial agreement. Even if you ticked all these safeguarding boxes, the court may conclude that if the wife gets nothing, as you are keeping everything, the outcome is unfair because the wife’s needs are not being met. The court may therefore disregard the terms of the agreement.
A prenuptial agreement solicitor will normally recommend that your prenuptial agreement or postnuptial agreement does not allow you to keep everything as it is better to have an agreement that works and therefore one that gives your wife a modest financial settlement that meets her financial needs rather than sign a prenup that says you will get to keep everything if you divorce but the prenup then doesn’t work in practice if you split up from your wife.
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If my wife agrees that I will keep everything, can I get a financial court order?
The court can be asked to make an agreed financial consent order. The agreed order is lodged by your divorce solicitor after your conditional order of divorce has been pronounced. The order must be accompanied by a standard court form (called a statement of financial information) summarising the details of your marriage and your personal and financial circumstances. If this prescribed form is not completed the court will not approve your financial court order.
If, for any reason, the figures provided in the form are wrong (for example you say your company shares in a family business are worth £10,000 rather than a more realistic 1 million) your wife will be able to reopen her financial claim at a later date because of inaccurate financial disclosure that led to the financial court order being made. Your ex-wife could ask the court to make another financial court order giving her a reasonable share of the assets. Therefore, inaccurately valuing assets on the form does not give you the financial security you need. If the shares in your family business continue to increase in value, then by the date of your wife's further financial settlement application, your company shares could be worth 10 million. Providing inaccurate information in the court paperwork could cost you a lot of money if your ex-wife is advised to reopen her financial claims.
If you complete the prescribed form to accompany your application for an agreed financial court order and include accurate asset figures, and the document shows you will be keeping everything and your wife will be getting nothing, the judge may refuse to make the agreed order. The judge may ask questions in an email or letter to your divorce solicitors or may invite you and your wife and your family lawyers to a court hearing so the judge can understand the rationale behind the making of the financial court order.
You may think that the answer to keeping everything lies in making a deal with your wife that she doesn’t get anything but neither of you ask the court to make a financial court order. However, you then run the risk of your ex-wife deciding to apply for a financial court order at a later date and asking for money or property or a share of your pension. This could work against you if your property or other assets have gone up in value from the date you agreed with your wife that she would walk away with nothing whilst you keep everything.
What should you do if you want to keep everything after your divorce?
If you want to leave your wife with nothing the best option is to talk to a family law solicitor about whether you can achieve this and how to do so. Your family lawyer may tell you that it will be an uphill task and that you may be better off focussing on a lowball offer that meets your wife's reasonable needs but is pitched at a level where you can get a clean break financial court order from the family court.
A clean break court order means your wife can't come back later on and ask for more spousal maintenance or a share of your pension or equity in your house. That’s why it’s crucial to secure a court order to give you future financial security so you can plan for your future and not have concerns that your wife years later could come back and ask for money because she had nothing at the time of your separation.
For expert advice call our team of specialist divorce lawyers or complete our online enquiry form.
Robin Charrot
Sep 23, 2024
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5 minute read
A Family Lawyers Guide on How to Get The Most Out of Family Mediation
In this blog, our family law solicitors offer tips on how to get the best out of family mediation to help you resolve your family law issue.
For expert family law advice call our team or complete our online enquiry form.
Here are some tips on getting the best out of family mediation:
1.Do you know where you are going?
That may sound like a stupid question but often mediation sessions take place at a mediator’s office and the location may be unfamiliar to you. Your mediation session will not get off to a good start if you arrive late or flustered.
2. Do you have time?
Most mediation sessions last for about an hour to an hour and a half. Sometimes they can run over a bit. It is best to avoid booking the mediation meeting on a day or at a time when you need to rush off to an important business meeting or to do the school run.
3. Is it the right time to mediate?
If a couple has been separated for a while, then it may be the right time to go to mediation. For others, the timing can be more complicated as one of you may feel too raw about the relationship breakdown to be able to engage in mediation.
It is always a balancing exercise because you do not want to leave starting mediation for too long but starting it before one of you is ready can be counterproductive. A spouse who is finding it hard to come to terms with the marriage breakdown might find it helpful to have a period of counselling before or during the mediation sessions.
4. The choice of mediator
Make sure that the mediator is right for you and your spouse or ex-partner. Your solicitors should ideally agree on the choice of mediator.
It can be hard to choose a mediator but do not be swayed by their location and convenience or your friend’s views. These can be important considerations but other factors may influence your decision. It may be the case that you know your spouse would feel more comfortable with a male or female mediator. You may be keen to accommodate their wishes to give mediation the best chance of working.
Your family finances may also be a consideration when looking at the choice of mediator. If you own a family business or have complex finances a mediator with a legal or financial background might best meet your needs.
5. The mediation agenda
At the outset of the mediation sessions, the mediator will normally discuss and agree on an agenda.
You may only have one item on your agenda, for example, to keep the family home or your pension. Although it is important that your spouse, your solicitor and the mediator know what your priority is, it is also important that other things and options are put on the agenda for discussion.
6. Listen
Mediation is a two-way process. That is why it is hard, as you need to listen to your ex-partner’s views to try to reach a compromise. Listening to them should ensure that they treat you with the same courtesy and listen to what you have to say. Mediation sessions can be emotionally hard and can sometimes bring up painful topics or memories. If it is too much for you ask for a break. It is better to have a break rather than continue when you are very emotional or upset.
7. Ask for explanations
Solicitors, mediators and spouses can all assume that you know what they are talking about when they use legal terminology or talk about financial matters, such as pension-sharing options or mortgage finance.
If you are uncertain, about what has been said or what is proposed then ask for clarification. A mediator cannot give legal advice but they can explain legal or financial terminology. You should also ask for a detailed explanation from your family law solicitor and not make any decisions about your options and any proposed agreement until you have done so.
8. The past is in the past
When you are in mediation, it can be tempting to go back over old history. Sometimes it can be relevant. For example, if one of you paid the deposit on the family home or received an inheritance. Sometimes going over old history just makes it harder to reach a compromise. For example, if you want to look at the reasons for the marriage breakdown.
Mediation is normally about looking at the future and helping you reach an agreement that will work for the family. If too much time is spent on reviewing what went wrong it can be hard to focus on reaching an agreement.
9. There is more than one option
It is very rare for there to be only one solution in mediation. There are normally many options and it is best to go to mediation without having a fixed view that your preferred resolution is the only acceptable option.
10. Do your homework
A mediator will often ask you to bring some paperwork or carry out some investigations before the next mediation session. For example, you may be asked to get an estate agent’s appraisal of your family home or to speak to a mortgage advisor to look at your mortgage options.
Even if you do not want to sell the family home or get a new mortgage, it is important that you do the homework. If you do not your ex-partner may get frustrated by the mediation process and start court proceedings. You will then lose the chance to try to reach a mediation agreement.
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Talk to your family law solicitor
Mediation should not be carried out in isolation from legal advice. It is a common misconception that the mediator will give legal advice. They cannot do that. Their job is to act as an impartial mediator to facilitate an agreement. They therefore will not take sides or advise you.
Mediation works best if you have mediation support. That involves:
Talking about what mediation entails, looking at the alternatives and deciding if mediation is right for you. If there has been domestic violence or a power imbalance then an alternative to mediation may be better for you. If you have reached a broad agreement a one-lawyer amicable divorce service may meet your needs
Getting legal information and advice about your separation and divorce and the timing of the no-fault divorce
Getting advice about your financial claims, for example, you need to know if you have a pension claim and the legal answer will depend on whether you are or were married to your ex-partner or not
Explain why you need financial paperwork to help you reach decisions in mediation and, if necessary, review your spouse’s paperwork with you
Getting advice on the types of orders that a court might make if you or your ex-partner were to start court proceedings so you can make an informed decision about any financial or parenting agreement discussed in mediation
If an agreement is reached, prepare a draft financial court order or child arrangement order for a judge to then approve
All our family lawyers can support you on your mediation journey to help you reach an agreement on childcare arrangements or a financial settlement after a separation or divorce.
For expert family law advice call our team or complete our online enquiry form.
Robin Charrot
Jan 18, 2024
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7 minute read
Is a Prenup a Good Idea?
There is still a bit of wariness about raising the topic of a prenup with a fiancée or signing a prenuptial agreement.
In this blog, our Manchester family solicitors look at whether a prenup is a good idea.
For expert family law advice call our team or complete our online enquiry form.
Is a prenup agreement a good option?
Manchester prenup solicitors are often asked what the point of a prenuptial agreement is if it isn’t legally binding in the English divorce court. However, although a prenup agreement isn’t binding on the English family court, Manchester prenup agreement solicitors say that provided the agreement is drawn up properly it could be given substantial weight. In real terms, if you are a high net worth individual, a prenup could save you millions. If you aren’t a high net worth individual, a prenup agreement is still a good idea because:
The prenuptial agreement could ring fence or safeguard pre-marriage acquired assets, such as a family inheritance, a trust fund, a family business or farm, or a pension that you contributed to many years before your planned marriage
The prenup could protect children from an earlier marriage or relationship by making sure that if you get divorced your second wife or husband doesn’t walk away with assets that you brought to the marriage or that you need to provide for your children from an earlier relationship
If you draw up a prenuptial agreement before the marriage and the terms are fair to both of you the agreement should reduce animosity and legal costs if you decide to separate at a later date
When will a court follow what is in a prenuptial agreement?
If you are contemplating signing a prenuptial agreement then it is essential to know when a court will, or is likely, to follow what is in the prenuptial agreement when ordering a financial settlement as part of divorce proceedings.
There are three potential scenarios if you sign a prenup and either you or your spouse later start divorce proceedings:
The divorce court ignores what is in the prenuptial agreement – either because the court doesn’t think that the agreement was drawn up with safeguards in place or doesn’t meet one spouse’s needs
The divorce court places weight on the prenuptial agreement and although the agreement isn’t followed to the letter the divorce court makes a financial settlement award that is less generous than it would have made had the prenuptial agreement not been signed
The divorce court follows the agreement recorded in the prenup and makes a financial settlement and financial court order in accordance with the provisions in the prenup
You are more likely to get the divorce court to follow options 2 or 3 if the court is satisfied that the prenup was freely entered into by each party to the agreement with a full appreciation of its implications unless in the circumstances prevailing at the time of the separation or divorce it wouldn’t be fair to hold the parties to the terms of their prenup agreement.
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It is often assumed that there is no free will involved in signing a prenuptial agreement as either the intended husband or wife has all the power and the other person feels that they have little alternative but to sign the prenuptial agreement if they want to get married. However, prenup solicitors say that every prenuptial agreement should be freely entered into to avoid the divorce court ruling that one person didn’t understand the agreement and therefore shouldn’t be bound by its terms.
To give the prenuptial agreement the best chance of being upheld in any subsequent divorce and financial proceedings, the following requirements should be met:
The terms of the prenup must be fair and meet the needs of the parties and any children who are dependent on them. If the agreement isn’t fair, it isn’t likely that the agreement will be fully upheld or even partially upheld. A good prenup solicitor can advise on the fairness principle the divorce court uses to guide you on what provisions to put in the agreement
The prenup was entered into voluntarily with no undue influence or duress and of your own free will and signed and executed as a deed
There is financial disclosure of each other’s financial circumstances. Financial disclosure is essential even if you are wary about detailing the full extent of your net wealth or your partner is embarrassed about their debts or income. Unless you know what the other has you can’t make informed choices about what should go in the prenup and what would be fair provision if you were to separate
The prenup should be signed in advance of the wedding. The recommendation by the Law Commission report is that prenuptial agreements should be entered into at least 28 days before the marriage or civil partnership
Independent legal advice on the prenup is taken. That is to ensure that you both understand the legal consequences of signing the prenup and what you might be gaining or losing by entering into the prenuptial agreement
Should I sign a prenup?
You should only sign a prenup if you are willing to be bound by the terms of the agreement. You should not enter a prenuptial agreement thinking that you can argue, in any subsequent divorce proceedings, that the terms of the agreement are unfair to you. That argument may not succeed if the agreement was drawn up properly with the safeguards in place.
Likewise, if you have substantial pre-marriage acquired wealth or you want to ring-fence specified assets or you don’t want financial arguments at the time of any divorce proceedings a prenup can be a sensible option for both you and your intended husband or wife.
We are Manchester Prenup Solicitors
Manchester and Cheshire-based Evolve Family Law solicitors specialise in preparing relationship agreements and advising on prenuptial agreements.
For advice about a prenuptial agreement or relationship agreement or other aspect of family law call us or complete our online enquiry form.
Robin Charrot
Oct 04, 2023
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6 minute read
Do I Need A Cohabitation Agreement?
As specialist family law solicitors, we get to deal with the fallout when a cohabiting couple separates and can't reach an agreement over whether their family home should be sold, or how the equity should be split, or whether the house should be transferred to one of them.
Court proceedings over property ownership can be protracted and expensive as the court assesses property and trust rights. Potentially your family law solicitors have to go back years to gather evidence on who paid the deposit, mortgage, or contributed to the house renovation costs. This hassle and cost may be avoided if you sign a cohabitation agreement.
For help from expert family lawyers call our team of specialist family lawyers or complete our online enquiry form.
When do you need a cohabitation agreement?
Most people think you only need a cohabitation agreement if you are buying a family home with a partner. That’s not the case. You need a cohabitation agreement in a range of different circumstances, such as:
Buying a house in your sole name but your partner intends to live with you at your house
You own a house and your partner is moving in with you
You jointly own a house with your partner but your personal or financial circumstances are changing. For example, you have inherited some money and intend to pay the mortgage off with your inheritance
You are going to jointly buy a property with your partner and you are contributing different amounts of money towards the deposit, or one of you is getting money from family to pay the deposit, or one of you will be paying all or a larger percentage of the mortgage and household bills
There are many other reasons why a couple may need a cohabitation agreement. That is why, if you are thinking of buying a property or you have formed a new relationship, it is sensible to ask the question ‘do I need a cohabitation agreement?’ and to get the question answered by an expert family solicitor.
You may think that a family solicitor is trying to sell you something that you don’t really need as most people don’t realise (until it is too late) that if your partner moves into your house, they have a potential claim over the property under property or trust law even though their name is not on the title deeds. Equally, if you have been in an unmarried relationship for many years, you may have no rights to a share in the equity in your partner’s property because of the complexities of property and trust law.
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What goes into a cohabitation agreement?
A cohabitation agreement can be as broad or as detailed as you chose. If a partner is moving into your house your agreement could say that your partner will not have a beneficial interest in your property even if they contribute to the mortgage or renovation costs unless you sign another cohabitation agreement setting out their interest in your property. That type of cohabitation agreement minimises the risk of your partner claiming they have a beneficial interest in the property because you took money off them as rent and payment towards household bills but, after you split up, your ex alleges their monthly contribution paid towards the mortgage so they have a claim over the equity in the property.
If you are buying a property jointly with your unmarried partner then your cohabitation agreement could record the detail of who paid the deposit, how the mortgage payments will be split, and other details, so you avoid having to get information and paperwork many years later to prove you paid the majority of the deposit and mortgage or to try and prove that it was agreed that you would get 70% of the equity because it was your inheritance from your grandmother that enabled you to pay the deposit and stamp duty.
It pays for an expert family solicitor to talk to you about your options and to prepare a bespoke cohabitation agreement for you. Most people assume that a cohabitation agreement has to be a standard document but it can be created to meet your relationship and property needs and be as straightforward or as complicated as you want to make it.
Can a cohabitation agreement be changed?
Some couples are reluctant to sign a cohabitation agreement because they think that circumstances may change. For example, if your partner is moving into your house the initial intention may be that the house will remain yours but that may change over time if you want to renovate or extend the property. Alternatively, once your relationship is established you may want your partner to share the mortgage payments with you, whilst still wanting to protect the equity that you built up in the property before your partner moved in with you.
Cohabitation agreements can be changed as your relationship develops or circumstances change but it is essential to record your revised agreement in a new document. That’s because most cohabitation agreements say any verbal promises or assurances will not carry any weight and any changes to your original agreement must be in a deed. A signed agreement avoids expensive court proceedings over whether conversations occurred, whether you really intended to give your partner an increased beneficial or property interest, or whether your partner misinterpreted your conversation or twisted it to their advantage.
If I don’t sign a cohabitation agreement, is the jointly owned house half mine?
The house isn’t necessarily half yours if you don’t sign a cohabitation agreement. It all depends on how the house was legally purchased (was the family home bought as joint tenants or tenants in common) and what your intentions were. Not having a cohabitation agreement can result in expensive court proceedings if one partner decides they want to claim half the house when they didn’t pay half towards the deposit or if one partner wants more than half the equity in the family home because they paid for the extension or for the new bathroom. A cohabitation agreement will cover who gets what percentage of equity in the house if it has to be sold. A bespoke agreement can also cater for one partner paying for renovations or paying off the mortgage.
Key points on a cohabitation agreement
Even if a house, investment, or business asset is owned by one partner, the other party to the relationship can still make a property or financial claim based on verbal or written promises, trust, and property law. The cost, risks, and inherent uncertainty of court litigation can be avoided, or significantly reduced, by a cohabitation agreement.
For help from expert family lawyers call our team of specialist family lawyers or complete our online enquiry form.
Robin Charrot
Jan 12, 2023
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6 minute read
What is a Postnuptial Agreement?
You may have heard of prenuptial agreements but not everyone is aware that you can sign a document that is similar in nature to a prenuptial agreement but completed after your marriage. It is called a postnuptial agreement.
A postnuptial agreement is entered into by a couple who are married or in a civil partnership and who want to record how their assets will be shared (or a specific asset, such as the family farm or business, will be ringfenced) in the event of their separation or divorce.
In this article, family law solicitor, Robin Charrot, answers your questions on what a postnuptial agreement is and whether they work.
For expert advice on prenuptial and postnuptial agreements call our team of specialist divorce lawyers or complete our online enquiry form.
When do you get a postnuptial agreement?
A postnuptial agreement is not limited to those who ran out of time to negotiate and sign a prenuptial agreement before their marriage or civil partnership. You can sign a postnuptial agreement whether you have been married a day, a year, or 31 years. It is therefore never too late to get family law legal advice about a postnuptial agreement.
It is a common fallacy that your husband or wife will only ask about a postnuptial agreement if they believe the marriage is in trouble. That is not true. Many happily married couples ask about postnuptial agreements, often triggered by a friend’s highly acrimonious divorce and a desire to avoid that type of dispute or because a life event has made them appreciate that a postnuptial agreement is just like precautionary insurance; sensible planning and a useful document to have.
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Should I sign a postnuptial agreement?
There are many reasons why you may consider discussing a postnuptial agreement with your husband, wife, or civil partner. Their initial response may be bemusement as many assume that postnuptial agreements are only signed by Londoners or those who mix in ultra-high net worth international jet-setting circles. If you do not have a yacht or a holiday home in the Caribbean you may think that a postnuptial agreement is out of your league.
As specialist family law solicitors based in Cheshire and North Manchester, we have seen a rise in inquiries about postnuptial agreements from across the Northwest of England. They help protect family wealth and minimise the emotional and legal costs of sorting out a divorce financial settlement dispute at the time of a separation or divorce.
The rise in popularity of the postnuptial agreement is a natural progression from the increased take up of prenuptial agreements.
Triggers for considering a postnuptial agreement include:
An increase in marriages with non-British nationals and the acceptance of postnuptial agreements in some overseas countries as a usual step in marital planning
The number of couples getting married later in life and acknowledging the need to take ongoing sophisticated legal advice given the extent of their assets and their desire to protect some of their wealth for children from earlier relationships
Business owners wanting to protect business assets from the impact of a separation or divorce as without an agreement in place the court could be asked to order the sale of a business or shares
The trustees of a discretionary trust wanting to make capital or income distributions to a beneficiary of the trust fund and raising the advisability of a postnuptial agreement to protect trust distributions
The older generation who wants to start lifetime gifting to a son or daughter, having been advised of the inheritance tax advantages of estate planning by their private client lawyers or financial advisors, but who are wary of making substantial lifetime gifts unless they can be reasonably confident that their family money will not be given to their son in law or daughter in law in any divorce settlement
Couples who entered into a prenuptial agreement and a change in life circumstances results in a need to change the terms of their prenuptial agreement
Couples who contemplated divorce proceedings but decided to make a go of their marriage and, after having had some experience of the divorce financial settlement process, want to put a postnuptial agreement in place so that if they do end up splitting up there is less chance of costly and fraught divorce financial settlement court proceedings to split the assets
Relocation to the UK or to another country and given the difference in divorce laws a recognition of the benefits of a postnuptial agreement setting out the jurisdiction for any future divorce as well as the split of money and other assets
Divorce solicitors are confident that in the future prenuptial agreements and postnuptial agreements will be seen as an essential part of life planning, in much the same way as taking out life insurance, signing a Will, finalising a Lasting Power of Attorney, or carrying out a regular investment portfolio review with a financial advisor.
Thinking about a postnuptial agreement
If you are thinking about a postnuptial agreement, it is best to be aware that there must be:
An agreement with your husband or wife. There can be no element of duress or coercion
Disclosure of current relevant financial and other circumstances
Specialist legal advice taken by both husband and wife on their postnuptial agreement
If all those elements are properly ticked off and the agreement provides a fair split of the family assets the postnuptial agreement should be upheld by a divorce court in any subsequent divorce financial settlement proceedings.
Postnuptial agreements are individual to the couple and no agreement will be the same. That is why it is so important to get expert postnuptial agreement legal advice, whatever the reasons behind why you are contemplating a postnuptial agreement.
For expert advice on prenuptial and postnuptial agreements call our team of specialist divorce lawyers or complete our online enquiry form.
Robin Charrot
Dec 07, 2022
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5 minute read
International Family Law and Prenuptial Agreements
It is trite to say that the world is getting smaller but when it comes to family law, it is true as there is an increasing number of UK families with connections to more than one country. That has led to a rise in the number of requests for help from families with international family law concerns or requiring advice on an international prenuptial agreement.
For expert family law advice call our team of specialist family lawyers or complete our online enquiry form.
International prenuptial agreements
As specialist family law solicitors with many years of experience in preparing prenups and postnuptial agreements, we have seen an increase in inquiries about nuptial agreements with an international element, not just from couples who are based in Manchester and the North of England, but also from couples who are based in London and the South East of England wanting expert advice at a competitive cost. That increase in inquiries is down to the following trends:
The number of UK residents meeting and marrying partners from other countries
The number of couples who own assets overseas such as a holiday home or a business based abroad
Couples who are UK based but whose families or family assets are based abroad; normally their families are passing some of their wealth to the marrying couple (to give them a financial head-start, or for tax planning reasons) but the families realise that this wealth is vulnerable to divorce without a prenup in place
The number of people who are a beneficiary of an offshore trust
The number of overseas families who have settled in the UK but already have a prenup in their country of origin or in the country where they hold assets
The law on international prenuptial agreements
Although the world is getting smaller divorce law has not been globalised. Divorce laws, practices, and procedures vary widely from country to country. The unwary can therefore falsely assume that having signed a prenup agreement in country A that their agreement will be binding in their spouse’s country of origin B, or if they decide to emigrate to country C.
Whenever the prenuptial agreement solicitors at Evolve Family Law are asked to prepare a prenup it is important to ask the right initial questions. For international prenups the questions should include:
Country of domicile for both parties to the marriage. This can be different from the country the engaged couple lives in as it is a complex legal concept
Countries where any existing assets and property are located
Countries where any future assets and property are likely to be located
The country or countries that one or both of the couple may relocate to in the future, for example, the plan may be to spend a lot of time in the Florida holiday home
To add to the complexities of advising on prenuptial agreements it is important to remember that Scotland, Ireland, the Isle of Man, and the Channel Islands all count as separate countries.
If the answers to any of these questions reveal a foreign connection, it is really important to work out which country the prenup should be based in. For quite a few prenuptial agreements the answer is not England.
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Getting international prenuptial agreements right
Family lawyers should not be wedded to their own jurisdiction and assume that a prenuptial agreement should be prepared in England as that is not necessarily the best decision for a client. It can make a massive difference to how assets are divided if a couple split up without having either signed a prenuptial agreement or if they did not get an agreement prepared in the country that best suits their international links and circumstances. That’s because in some countries prenup agreements are treated as legally binding and in others they ‘are not worth the paper they are written on’.
Even if England is the right country for the prenuptial agreement to be prepared in, it is important to think about whether a ‘mirror’ prenup agreement is needed in the other countries the couple are linked to, or at least having a specialist family lawyer in that other country having some input on the wording of the prenup, so that the agreement is executed in accordance with the relevant local law and the agreed country for choice of jurisdiction is recognised.
Is an international prenuptial agreement worth signing?
With or without international aspects, our family law solicitors are asked if it is worth signing a prenuptial agreement. Invariably the answer is that a prenup is a sensible piece of relationship planning: No one who is getting married thinks their marriage will fail, but almost half do. It is also really helpful for the couple to think properly about their future financial security if things do go wrong. Also, the English divorce courts now rarely go against a prenup that has been put together in the right way.
Preparing a prenup includes an element of speculation as who knows what may happen in relation to the couple’s future life together. However, it is normally possible to build in enough flexibility to deal with life changes. If life takes an unexpected course, such as a return to the UK after a marriage abroad with a foreign prenup, it is as well to dust off the document and get some advice on whether it remains fit for purpose.
For expert family law advice call our team of specialist family lawyers or complete our online enquiry form.
Robin Charrot
Nov 09, 2022
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5 minute read
How To Get a Prenup
In a straw poll the majority of engaged couples could see the sense in signing a prenuptial agreement before their wedding but they weren’t sure how to go about getting one. In this article prenup agreement expert, Robin Charrot, looks at how to get a prenup.
Are prenups unromantic?
If you are engaged to be married you may be worried about raising the idea of a prenuptial agreement with your fiancée or fiancé. That’s totally understandable as no one wants to appear unromantic or to cast a pall over the engagement celebrations.
Whilst prenups may not be romantic they do show that you care and that you are taking your future seriously. That’s because a prenuptial agreement has to be ‘fair’ to both a husband and wife or to both civil partners. Therefore, if you are the financially weaker party to the marriage or civil partnership, the suggestion of a prenup, whilst not romantic, can offer you peace of mind and financial security.
Who wants a prenup?
As prenuptial agreement solicitors we are often initially approached by third parties wanting to make initial enquiries to help sort out a prenup for an engaged couple. There can be many very valid reasons for this, such as:
Parents wanting to protect the deposit on the family home because they gifted the deposit money to their son or daughter.
Grandparents wanting to make lifetime gifts to a grandchild as part of estate planning and wanting to keep gifted money ‘in the family’.
A parent or grandparent, having transferred assets to a child to avoid care home fee issues or to minimise inheritance tax, wanting to ensure that the transferred property is ring fenced in the prenuptial agreement.
A family member who has transferred shares in a family business to the younger generation as part of business and retirement planning.
The trustee of an onshore or offshore discretionary trust where the trustees anticipate making future capital or income distributions.
A family member who has left a substantial legacy in their will to a family member and who wants to ensure that their legacy is protected through the prenuptial agreement ringfencing it.
A parent or family member has been through a difficult divorce and wants to protect the engaged couple by ensuring they sign a prenuptial agreement to ensure that they don’t end up in a bitter and expensive court battle over the divorce financial settlement.
A parent or other family member is from overseas where prenuptial agreements are common place.
An accountant or financial advisor or other professional who wants to ensure that a client is financially protected, for example, where one party to the marriage has already inherited a lot of money or won the lottery or is a sportsperson with exceptionally high earnings but a time limited career span.
In addition, many engaged couples are also proactive in seeking out prenuptial agreement advice. For example, a financially weaker party to the marriage may actively seek a prenuptial agreement to show they aren’t a gold digger or to show extended family that they aren’t marrying for financial reasons. Equally, the financially stronger party to the engagement may want to protect their partner with the security of a prenuptial agreement that meets their needs should the couple take the decision to separate at a later date.
How to get a prenup
The often-asked question is ‘how to get a prenup’ whereas the question really is ‘how do I get my partner to agree to a prenuptial agreement and how do I tactfully raise the topic?’
Every couple is different so what works for one won’t work for someone else but prenuptial agreement solicitors say it is best to avoid the topic whilst on bended knee or when saying yes. Equally, it is best not to leave the question of a prenup to the last minute when you or your partner are stressing about wedding arrangements and last-minute preparations. In addition, for a prenup to carry weight with the family court, it should ideally be signed twenty-eight days before the wedding. That means the topic of the prenup agreement has to be raised well in advance of the wedding date so that the contents can be discussed and agreed.
One of the best ways to raise the topic of a prenup is in a general discussion about your future together. For example, you may be planning to move in with a partner or buy a house together or contemplating starting a family.
Another possibility is to raise the topic as part of your financial paperwork. For example, if you are planning on writing a new will in contemplation of your marriage or signing a new power of attorney or taking out additional life insurance.
The key point about a prenup agreement is that the agreement should protect both of you as the agreement needs to be fair and meet both of your respective needs to be given weight by the family court.
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Conditions for a prenup
Prenuptial agreement solicitors say unless both of you comply with some conditions for a prenup agreement the document may carry little or no weight and therefore may be a pointless exercise. The conditions for a prenup are:
The prenup must be freely entered into.
You and your partner must fully appreciate the implications of entering into the prenup.
The agreement must not be significantly unfair to one spouse or civil partner.
You and your partner must each have your own independent legal advice.
You and your partner must each provide financial information about your assets, income and any debts.
A prenup should ideally be finalised at least twenty-eight days before the wedding.
Prenuptial agreement solicitors say that if you are interested in learning more about the option of signing a prenuptial agreement then the best way forward is to have a chat with an expert so you get a better idea of how a prenup may help and protect your family.
We are family law and prenuptial agreement solicitors
For legal help with a prenuptial agreement call us or complete our online enquiry form.
Robin Charrot
Jul 01, 2021
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6 minute read
Are Prenuptial Agreements Legally Binding in the UK?
The short answer to the question ‘are prenuptial agreements legally binding in the UK?’ is no but please read on as prenuptial agreements can save you a lot of money. They are the financially prudent and the sensible, if unglamorous part, of wedding planning.
What is a prenuptial agreement?
A prenuptial agreement is an increasingly common document that an engaged couple enter into prior to their marriage. If someone isn’t sure what a prenuptial agreement is or what it does then they can be more wary about signing the document so it is best not to make assumptions about your partner’s understanding of what a prenuptial agreement is and will do.
In essence a prenuptial agreement will govern how a couple will regulate and resolve their financial affairs in the event of a separation. The prenuptial agreement is bespoke to the couple and can be as detailed or as simple as the couple prefer.
Prenuptial agreements and UK family law
Now is a good time to answer the question ‘are prenuptial agreements legally binding in the UK?’ That’s because the leading family law case report on prenuptial agreements was ten years old in October 2020. The case remains good case law that is followed by family law judges when they are asked to consider a prenuptial agreement in divorce and financial settlement proceedings. The judges follow this case report, and later decided cases, in the absence of any UK legislation on the status of prenuptial agreements in UK divorce law.
The leading family law case on prenuptial agreements remains the 2010 UK Supreme Court decision of Radmacher v Granatino.
What is the legal status of prenuptial agreements?
A prenuptial agreement doesn’t have any statutory or legislative basis and isn’t a binding contract in the same way as a commercial contract. However, that doesn’t mean that a prenuptial agreement doesn’t have legal status. It gets its status from case law, particularly from the leading court case of Radmacher.
Prior to the case of Radmacher prenuptial agreements were thought to be contrary to public policy because they might encourage separation, though the reality was couples wanted to enter into prenuptial agreements, not with a view to separation, but to cover that eventuality, in the same way couples organise life insurance, Wills and Lasting Powers of Attorney. The Radmacher case acknowledged the importance of couples being able to freely enter prenuptial agreements.
The status of prenuptial agreements after the Radmacher court case
In the Radmacher case a French husband and a German wife entered into a prenuptial agreement three months before their marriage. In essence, the prenuptial agreement said that neither the husband nor the wife would make a claim on the other’s property if they separated and got divorced. The couple had two children together but eventually separated. The husband made a financial claim and the wife said the prenuptial agreement should be binding on him.
During the financial court proceedings the court had to assess the relevance of the prenuptial agreement. The wife, who was heir to family wealth, said the prenuptial agreement should be binding but the husband argued that it wasn’t. His argument was based on the fact that he did not have legal advice when he agreed to the prenuptial agreement, there had been no financial disclosure or negotiations before the agreement was signed and the couple had children after entering into the agreement.
The court case went all the way to the Supreme Court and that’s why it remains a leading case on the status of prenuptial agreements in financial court proceedings. The Supreme Court said that ‘’the court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement."
The key points from the Radmacher case is that your prenuptial agreement must be freely entered into and should be fair.
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What is a freely entered into and fair prenuptial agreement?
As it is ten years since the Radmacher decision not only are more couples choosing to enter into prenuptial agreements but the family court is also being asked to look at the relevance of prenuptial agreements in divorce and financial proceedings.
If you are looking at signing a prenuptial agreement then it is important to ensure that your agreement is drafted by a prenuptial agreement solicitor who knows what the court will look at when deciding whether to enforce the agreement or to give it weight in any financial court proceedings.
Whilst prenuptial agreements are not currently automatically enforceable as a contract the family court will either enforce it or give weight to the terms of the prenuptial agreement (thus potentially reducing the size of the financial settlement that would otherwise have been awarded in divorce and financial proceedings ) if the following formalities are met:
The terms of the prenuptial agreement must be fair to both parties and must meet the needs of any children
There must have been financial disclosure so that the husband and wife each had an understanding of the other’s financial position so they could make informed decisions about the content of the agreement and whether to sign it
The prenuptial agreement should be signed at least twenty one days prior to the marriage ceremony or civil partnership
The agreement should be freely entered into with no duress or undue influence or misrepresentations about signing the prenuptial agreement
Both parties to the prenuptial agreement should take their own independent legal advice before signing the document.
Is a prenuptial agreement a good idea?
Since the Radmacher case prenuptial agreement solicitors have seen a substantial rise in enquiries about both prenuptial agreements and postnuptial agreements. That is because, in today’s age, couples want to plan and feel financially secure, whatever the future holds for them. To a family solicitor that is just sensible and prudent planning from a committed and switched-on couple who don’t want to engage in expensive court litigation should they decide to separate at a later date.
Our Prenuptial Agreement Solicitors
For help with your prenuptial agreement or postnuptial agreement call the friendly, specialist prenuptial agreement solicitors at Evolve Family Law or complete our online enquiry form. Our offices in Holmes Chapel, Cheshire and Whitefield, Manchester are open with social distances measures in place for face to face meetings, however an appointment is required. We also offer remote meetings by appointment by video call or telephone for those who prefer not to travel.
Robin Charrot
Feb 18, 2021
·
6 minute read
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