Christmas, New Year, and the Case for Prenuptial Agreements
Christmas and the New Year are not just a time for resolutions. They are also about reflections and plans and a popular time to make major decisions around family life and relationships.
The festive period, or when the children go back to school, is a peak time for couples getting married or deciding to divorce. Wedding surveys suggest more than a third of all engagements take place at this time, with Christmas Day being the most popular day to propose, followed by Christmas Eve and New Year’s Day. The only other day to get a specific mention is Valentine’s Day.
It is easy to see why couples use this time of celebration to pop the question, with the focus then turning to the wedding plans. There are endless things to think about when planning a wedding – the budget, location and venue. Who will get an invite, who won’t! That is before flowers and colours are even considered.
In all the excitement and plans, few couples even contemplate broaching the subject of what might happen to their finances in the event of a future separation or divorce. A prenuptial agreement is not usually seen as an essential for the big day.
The two most common misconceptions are that prenups aren’t worth the paper they are written on as they are not legally enforceable and are simply for the rich and famous to manage multimillion-dollar affairs.
The truth is that prenups are relevant to many couples getting married who may be concerned about protecting their assets. This is particularly so for those families whose children are expecting to receive future gifts or inheritance.
The issue of inheritance tax and succession planning is in the news at present. Of course this is likely to impact those within the farming and agricultural communities, who wish to preserve wealth or ensure a viable business continues.
It is also likely to apply to anyone with a business or property, possibly with children from previous marriages or relationships. No one would hesitate to make a will, but a prenup carries a different stigma.
Wedding contracts are common in many cultures and indeed almost ubiquitous in some European countries. If the main purpose of the prenup is to protect family businesses, gifts or inheritances, say so. This will help your partner to understand the reason for a prenup. It shows that the prenup is not personal, but for the wider benefit of all concerned and is intended to leave you both with certainty should the worst happen.
Prenups are always going to be an uncomfortable subject to raise before marriage. Many have preconceived notions and baggage about prenups, that they are ‘unromantic’ or ‘pessimistic’, but this overlooks their true value. It is an opportunity to have an open and honest discussion about your future expectations and hopes in the marriage. The existence of a prenup can provide everyone with certainty and avoid a potentially costly and acrimonious legal battle should the marriage fail.
Timing for prenups
If you are already engaged, you need to be discussing the prenup as a priority so it can be put to bed before the other wedding plans. It should not be left until the eleventh hour. Presenting your partner with a prenup a week before the wedding as a fait accompli is not going to work – it will likely cause anger, and stress and be deemed invalid if there is evidence of duress or undue pressure. Both parties need proper time to reflect on their future objectives, and financial security and to take legal advice.
Choose your time carefully. Find a calm, neutral environment where everyone feels comfortable. This will help you to work out any issues in a measured and collaborative manner.
Be fair
Prenups work well when the overriding objective is to achieve a fair outcome for both parties and you have each other’s best interests at heart. This is something that should be discussed in conjunction with taking legal advice, as courts will only uphold a prenup if it is fair having regard to your overall financial circumstances.
Offer to pay for the prenup
If you are the financially stronger party or have assets you wish to protect, offer to pay for the prenup. This will likely include the cost for your partner to obtain separate legal advice, however, it is a gesture of goodwill that shows you also have your partner’s needs at the forefront of your mind.
The perceived expense should not be a stumbling block when considering whether to enter into a prenup. The cost of a prenup varies from case to case, depending on the complexity and assets involved. In many cases, the cost of a prenup pales in comparison to the other costs of the wedding. With this in mind, should one of your children or family members pop the question this Christmas, assisting them to spend money on a prenup may yet be the best present they can get.
