First and foremost it is important to point out that pre-nuptial agreements do not, as yet, have any legal standing in Ireland. As solicitors we do however get asked to draw up pre-nuptial agreements, regardless of the fact that they are not recognised legally adn are therefore not binding. Young couples, who are thinking of entering into marriage hope to protect their assets in the eventuality of a marriage breakdown, this is especially so if their assets comprise the family business or farm, they want to be able to pass this on to the next generation and not have this wealth going to someone who has not contributed to its accrual.
A pre-nuptial agreement is like a contract entered into between two parties. It is important that both parties who enter into the agreement do so of their own free will and with full knowledge of what they are entering into. It is therefore very important that both parties to this contract honestly set out the assets that they are bringing into a marriage. The contract tries to ensure that the asset brought into the marriage stays protected and that only assets acquired during a marriage can be dealt with during a separation or divorce.
To have any effect there are some basic rules that should be followed when entering into a pre-nuptial agreement, it should be
- in writing
- signed and witnessed by an indepedent party
- made after each party has obtained independent legal advice
- made not less than 28 days before the couple intend to marry
- made with full disclosure of all financial information and assets of both parties
The pre-nuptial agreement, similarly to a separation agreement or divorce, will set out a number of points as to what will happen should the couple separate and/or divorce. It should contain the following information:
- Succession rights – in a divorce they are usually extinguished
- a right to maintenance for either party or their children
- indemnity for debts – one spouse against the other, past and future
- how to deal with pension rights
- should there be any lump sum payments
- property division – what happens to property bought jointly, what happens to property brought into the marriage
- assets – how are other assets to be divided
- what country has jurisdiction – this would usually be Ireland
An accountant should be consulted and to give relevant information regarding the financial affairs of both and also to give appropriate financial advice. Perhaps an expert in inheritance law and inheritance tax law should also be consulted to ensure that proper advices can obtained, especially should there be children.
Both parties should have time to consider the agreement before it is signed and they should receive independent legal advise. The agreement should be done, if possible, with both sides meeting up with their respective legal teams and agreeing terms and both parties being satisfied with what it represents not just at date of signing but into the future. If both paries are not happy with the agreement then this is a very poor way of starting married life and, if possible, outside influences should be kept to a minimum, that is the input from relatives on either side.
Couples should think about putting in a review clause into their agreement. Circumstances change and quite often the arrival of children can cast a different perspective on the family dynamic. Also illness and other life changing events cannot be predicted so it is important to review such an agreement and to perhaps amend it to taken into account changes in circumstances. A review clause of every five years is desirable.
Most important is that both parties are happy to enter into the agreement, if it is done under duress or pressure it can and has led to a marriage dissentigrating before it really has a chance to get of the ground.