How to protect your assets if your relationship breaks down
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Taking early legal advice and putting a pre-nuptial or post-nuptial agreement in place can help to protect your assets, according to experts from Moore Barlow.
Victoria Walker, partner at the law firm, and Joanna Farrands, partner and management lead for the family team, explain why:
Q: When might someone wish to consider protecting their assets?
Most people think about it before they get married, enter a civil partnership or buy a property. It is quite common if someone is entering into a second marriage, particularly if they have children. In these cases, people might consider a pre-nuptial agreement. This can cover anything and everything.
Q: Why is it so important to think about a pre-nuptial agreement?
Many of us don’t realise that when we get married, we are signing up to share our assets. It doesn’t matter if one person thinks they earned everything or paid all the bills – or that it was their parents who gave them money. This happens a lot at the moment as it is so difficult to get on the property ladder without some family assistance. But if that money is not protected properly, and the relationship breaks down, it can be very contentious.
Q: But discussing money and making a pre-nuptial agreement is not romantic?
If people don’t think they can talk about these issues before they get married, then it’s not a good omen. Communication breakdown is one of the biggest causes of failed relationships so why not enter into the marriage the way that you mean to go on? Be open about your finances: discuss your assets and what happens if one of you has children and stops working. If you have a plan, then a pre-nuptial agreement can be part of that. It is not unromantic – it is just practical. If you are not getting married, but have decided to live together, you might want to consider a co-habitation agreement for the same reasons. We would also advise people to review their agreement when a big life event happens (having children, receiving a large inheritance etc), just to make sure it is still fit for purpose.
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Q: What can I do if I am already married?
You can get a post-nuptial agreement. Very often something, such as selling a family business selling or receiving an inheritance, will trigger this. At this point the couple might wish to ringfence the money for one party. If you do want to ringfence any money – either before or after you are married – then you must keep it out of your joint bank account. Put it in an ISA or premium bonds, don’t touch it, and seek legal advice.
Q: How can I protect my assets if I have no agreement in place?
It does make it much more complicated and much more expensive. We would always advise people to seek legal advice as soon as possible. The court is not particularly worried about what the assets look like, they will break it all down into numbers and then focus on dividing it up. It will be concerned about housing people and the interests of the children. Even if you are only thinking about ending a relationship, come to us before going ahead. It is also important to understand there are lots of different ways you can resolve matters, without going to court. These include mediation, collaborative law and private financial dispute resolutions (FDRs); but you will need specialist advice to help you find what is going to work for you and your budget.
Q: How much does a pre-nuptial agreement cost?
Costs can vary because these kinds of agreements are very bespoke to a particular situation, but in terms of how much money you could potentially save in a divorce, they are priceless. Whether you want advice because your relationship is breaking down, you have assets you want to protect before getting married or you have come into some wealth, we can be quite strategic about it if you come to see us in good time.
For more information visit moorebarlow.com or call 023 8744 0766.