Pre-nuptial agreements are entered into by parties who seek to regulate their affairs in the event of a breakdown of a marriage. The agreements are not strictly entered into by the Rich, we at Paul Tracey Solicitors draft the agreements for people from a variety of financial backgrounds.
More often than not such agreements are used to protect the assets of a wealthy fiancé, however couples of a modest means are increasingly turning to them in order to protect their assets.
1. What is a Pre-Nuptial Agreement?
A pre-nuptial agreement is an agreement entered into by a couple who are intending to marry and who set out how the main financial division of the assets is to be divided upon Divorce or Judicial Separation. The Agreement will vary according to each couples particular circumstances but will set out issues such as; lump sum payments, Pensions, maintenance and custody.
The agreement is made in order to try and avoid a dispute in relation to the division of the assets upon separation. The agreement is made with the intention of contracting out of the current Irish Family Law scenario and has the potential affect of treating the parties as if they had never been married and just remained partners or legal strangers
2. Why should couples enter a pre-marital agreement?
The agreement can act as a piece of mind for the couple who are entering marriage, it can assist in taking pressure off the parties if they are to separate and can help in making one spouse commit to the contract of marriage with the knowledge that there is a contract in place in the event of separation.
The pre-marital agreement could clarify potential arguments upon Divorce or Judicial Separation. The agreement will specify;
- The length of the pre-marital contract,
- Percentage division of present and future property,
- succession act rights,
- lump sum payments,
3. Are Pre-Marital Agreements enforceable?
Contrary to the prevailing public view, these agreements are not illegal or unenforceable in Ireland, however there are factors that can amend the intent of a prenuptial agreement in the event of the breakdown of your marriage.
The current opinion among the legal profession is that such agreements can be of assistance in the breakdown of the marriage as they can be referred to and used as a guide for the distribution of the assets so long as the Judge considers that the agreement was made fairly and responsibly and the interests of both parties have been looked after.
Public opinion is moving towards the acceptance that such agreements provide peace of mind and are of benefit to the parties when getting married. Recently the Government has proposed that prenuptial agreements be formally recognized for the first time. The basis upon which they should be recognized is that the Judges would still be allowed to take into account any changes in the married couples circumstances where a prenuptial agreement exists.
Pre-nuptial agreements are referred to under Irish Law under the Family Law Act 1995 Section 9(1)(c) and the Family Law (Divorce) Act 1996 section 14(1)(c) whereby a court may vary a pre-marital agreement. The court may look behind the agreement and may distribute the assets differently from what was proposed in the agreement.
In order for a court to consider the validity and enforcing the terms of such an agreement entered into by the parties it is necessary that the following requirements are fulfilled by both parties;
- Provide full disclosure of each of their financial situations.
- Receive independent legal advice concerning the effect the agreement will have on the breakdown of the marriage and the division of the assets of the parties.
- Receive independent legal advice in the situation if the marriage were to breakdown and no agreement were in place.
- Sign an acknowledgement that the agreement is intended to be legally binding
- Agree to insert a provision that the agreement should have periodic reviews every number of years or after a birth of a child or a major increase in wealth.
- Agree to the percentage split of the assets, maintenance, custody in the event of the breakdown of the marriage.
The agreement must be made in contemplation of what would be fair or what one party would receive in the event of the breakdown of the marriage. A court will have regard to such an agreement so long as it has substantial and procedural fairness.
4. Essential Factors for a Vaild pre-nup?
Time for Consideration, the parties must give themselves time to consider the document we suggest that the agreement be executed 3 months before the date of the marriage. This gives the parties time to reflect on the agreement.
Honesty, the parties must give full disclosure of their assets so that the agreement can be drafted as fairly as possibly and the distribution of the assets can fairly determined.
The agreement must be fair to all parties, this will depend on the circumstances of each case. The financial position of the parties at the time they enter the agreement must be considered.