Parties to marriages and de facto relationships can make agreements about what happens in the event their relationship ends
We regularly assist people seeking advice prior to or during a relationship, including as to Financial Agreements (known colloquially as ‘pre-nups or pre nuptial agreements’).
These types of agreements are not for everyone – however they can be useful for:
- “Second timers” – mature couples where they have been previously married and that are entering into new relationships who have significant assets. Whilst they are not planning to have children together they may have children (including adult children) from previous relationships for whom they need to protect future inheritances.
- “The children of the wealthy” – young couples who are likely to be gifted or inherit significant wealth from parents.
- Relationships where there are significant differences between what each party is bringing in to the relationship.
Financial Agreements are increasingly complex, especially when used as a risk management tool at the beginning or during the course of a relationship. Top-level advice is required to ensure strict compliance with the legislation to minimize the potential for the agreement to be challenged in future.
Each party to the Financial Agreement must have:-
- provided each other with full and complete disclosure of their financial circumstances in much the same way that they would do in the event of litigation.
- have obtained independent legal advice independently of the other, as to effect of the agreement on the rights of that party and the advantages and disadvantages, at the time that the advice was provided. There must be an exchange of legal certificates confirming this advice was provided.
People with complex business structures need to take particular care that they consider potential problems under any commercial contract with third parties. There may also be a need to seek specialised tax advice as to the revenue implications including stamp duty and tax. Other structures or documents may need to be reviewed as an overall financial planning or succession strategy.
