What Is a Prenup? Everything You Need to Know

A pren­up­tial agree­ment, com­monly known as a prenup, is a legal doc­u­ment cre­ated by a couple before mar­riage to out­line the di­vi­sion of assets and fin­an­cial re­spons­ib­il­it­ies in the event of a di­vorce or sep­ar­a­tion.

Prenup offers clar­ity and pro­tec­tion, en­sur­ing both parties un­der­stand their rights and ob­lig­a­tions. While often as­so­ci­ated with wealth, a prenup can be­ne­fit couples of all fin­an­cial back­grounds by ad­dress­ing prop­erty, debts, and future earn­ings, making it a prac­tic­al step in modern re­la­tion­ships.

But what is a prenup after all and what does it con­tain?

In this art­icle you'll find what is a prenup. It will in­clude all the basic in­form­a­tion about pren­ups and how to make one.

Prenup is a Legal Con­tract

In the UK, pren­ups have become in­creas­ingly common, with ap­prox­im­ately 20% of couples now en­ter­ing into mar­riage with a prenup in place. This rep­res­ents a sig­ni­fic­ant rise from pre­vi­ous dec­ades—only 1.5% of mar­riages in­volved pren­ups in the 1970s.

In the UK, a prenup is a leg­ally bind­ing con­tract entered into by a couple before their mar­riage or civil part­ner­ship. The prenup es­sen­tially sets out how they wish their assets to be di­vided if they di­vorce or have their civil part­ner­ship dis­solved.

Pur­pose of Pren­up­tial Agree­ments: Pren­ups serve as a pro­act­ive meas­ure for couples to es­tab­lish fin­an­cial and prop­erty ar­range­ments before en­ter­ing into mar­riage.

Their primary pur­pose is to provide clar­ity and pre­vent dis­putes in the event of a di­vorce or dis­sol­u­tion, of­fer­ing a simple frame­work for the di­vi­sion of assets, spous­al main­ten­ance, and other fin­an­cial mat­ters.

Prenup Ex­plained with a Video Game Ex­ample

Ima­gine you’re play­ing a video game where you’ve col­lec­ted a bunch of coins and power-ups. Now, think of a prenup like a spe­cial code that keeps your coins safe, even if you decide to stop play­ing with a friend.

Without this code, if you and your friend decide to go sep­ar­ate ways, there’s a chance you might have to split your game coins with them—even the ones you haven’t found yet!

So, without a prenup, your sav­ings and any future treas­ures you might get could be up for grabs, not just what you’ve already col­lec­ted.

Read more: Mar­riage vs. Co­hab­it­ing

Are Pren­ups Legal?

Pren­ups are leg­ally re­cog­nised but not auto­mat­ic­ally leg­ally bind­ing in Eng­land and Wales. This means that by en­ter­ing into a pre-nup­tial agree­ment, you cannot over­ride the court's abil­ity to decide how your fin­ances should be di­vided on a di­vorce. However, the court must give ap­pro­pri­ate weight to a prenup as a rel­ev­ant cir­cum­stance of the case.

It is im­port­ant to note that after the Su­preme Court de­cision in the case of Rad­mach­er v Granatino [2010], the court will now uphold a prenup that’s freely entered into by both parties (with a full ap­pre­ci­ation of its con­sequences) unless it would be unfair to uphold it. Provided that test is met, the court will give effect to a prenup.

What this means is that both parties must enter into the prenup will­ingly, with a clear un­der­stand­ing of its im­plic­a­tions. The courts will assess the fair­ness of the prenup based on sev­er­al factors, in­clud­ing the parties' in­ten­tions, fin­an­cial dis­clos­ure, and any changes in cir­cum­stances.

💡 The pop­ular­ity and legal re­cog­ni­tion of pren­up­tial agree­ments have been on the rise in the UK, es­pe­cially after key legal cases in the early 21st cen­tury that re­in­forced their sig­ni­fic­ance.

Lack of Prenup Com­plic­ates the Di­vi­sion of Assets

When couples tie the knot, the last thing on their minds is the pos­sib­il­ity of their mar­riage coming to an end. The idea of plan­ning for a di­vorce seems coun­ter­in­tu­it­ive, if not down­right pess­im­ist­ic, during such a hope­ful time.

However, a Pren­up­tial Agree­ment (Prenup) is not a bet against your mar­riage's suc­cess; rather, it's a prac­tic­al meas­ure for man­aging the un­fore­seen. The truth is, life is un­pre­dict­able, and a Prenup can serve as a safety net, en­sur­ing that both parties are pro­tec­ted, re­gard­less of what the future holds.

In the UK, where the di­vi­sion of assets can become a com­plex and con­ten­tious issue upon di­vorce, a Prenup provides a clear roadmap for what hap­pens if the un­think­able occurs. It allows couples to decide how their assets, in­clud­ing sav­ings, in­vest­ments, and in­her­it­ances, will be di­vided.

This foresight can be es­pe­cially cru­cial for safe­guard­ing per­son­al in­terests, such as in­her­ited wealth or family heir­looms, en­sur­ing they remain with the in­ten­ded party rather than being sub­ject to di­vi­sion.

Ex­ample: Suc­cess­ful Busi­ness, In­her­it­ance and Di­vorce

Let’s con­sider Jane and Alex, a fic­tion­al couple who mar­ried without a prenup. During their mar­riage, Jane in­her­ited a sig­ni­fic­ant sum of money from a re­l­at­ive, which she used to con­trib­ute to­wards the couple's shared home and living ex­penses. Alex, on the other hand, built a small busi­ness that star­ted to turn a profit in the later years of their mar­riage.

Un­for­tu­nately, Jane and Alex decide to di­vorce after sev­er­al years. Without a prenup, the di­vi­sion of assets be­comes com­plic­ated. Jane as­sumed her in­her­it­ance would remain hers alone, but since she com­mingled these funds with mar­it­al assets (like using them to­wards the shared home), that money is now con­sidered in the di­vi­sion of assets. Sim­il­arly, Alex’s busi­ness, grown during the mar­riage, is also sub­ject to di­vi­sion, des­pite it being his ven­ture.

The lack of a prenup means that both parties enter into po­ten­tially lengthy and costly ne­go­ti­ations over who gets what, with the risk that a court’s de­cision might not align with what either party con­siders fair.

The pro­cess can strain their fin­ances and emo­tion­al well-being, turn­ing what star­ted as an am­ic­able sep­ar­a­tion into a con­ten­tious dis­pute.

Ad­vant­ages of Having a Prenup

There are nu­mer­ous ad­vant­ages of having a prenup, in­clud­ing the fol­low­ing:

• Clar­ity. You and your part­ner can make it clear to one an­oth­er that cer­tain prop­erty be­longs to you alone and will not be shared during the mar­riage or on any future di­vorce.  
• Cer­tainty. You and your part­ner can agree at the outset of your mar­riage how your fin­ances will be di­vided if you later sep­ar­ate or di­vorce. This should save you both the un­cer­tainty, time and stress of lit­ig­at­ing about your fin­ances if you do later sep­ar­ate or di­vorce.
• Trans­par­ency. You and your part­ner should provide fin­an­cial dis­clos­ure of your assets and income in the pre-nup­tial agree­ment, so this means you will both know at the outset of the mar­riage the value of each oth­er­'s assets, which will assist you in your ne­go­ti­ations.
• May save money. While you and your part­ner will incur legal fees for cre­at­ing the prenup and ob­tain­ing in­de­pend­ent legal advice, it’s usu­ally much less ex­pens­ive to ne­go­ti­ate and draft a prenup than to lit­ig­ate about the di­vi­sion of your fin­ances should you later sep­ar­ate or di­vorce.
• Pro­tec­tion of assets. You can pro­tect assets, such as in­her­ited assets, family heir­looms, an in­terest in a family busi­ness, or prop­erty ac­quired before the mar­riage. If the prenup agree­ment pro­tects such prop­erty, the court is less likely to award a share of that prop­erty to the other party on any future di­vorce.
• Debt pro­tec­tion. If your part­ner has sig­ni­fic­ant debts, either now or in the future, the prenup can be used to pro­tect your assets from being used to sat­is­fy those debts. (This will also be the case with any debts you may have now or in the future.)
• Com­pens­a­tion for loss of career. You and your part­ner can agree that if, during the mar­riage, either one of you give up a po­ten­tially luc­rat­ive career to care for the family, that person should be en­titled to a great­er share of the assets on the break­down of the mar­riage to re­flect their loss of earn­ing power going for­ward. It is often dif­fi­cult to con­vince the court to award an ele­ment of "com­pens­a­tion" for loss of career, but pro­vi­sion for com­pens­a­tion in the prenup is likely to be upheld by the court.
• Pro­tec­tion of family mem­bers. If you or your part­ner have chil­dren from a pre­vi­ous re­la­tion­ship, a prenup can pro­tect their fin­an­cial in­terestsby en­sur­ing cer­tain assets are kept for them in the prenup.
• Min­im­ises ac­ri­mony on di­vorce. Set­ting out how assets are to be di­vided on di­vorce in the prenup should lead to fewer ar­gu­ments about fin­ances should you later di­vorce and result in a more am­ic­able re­la­tion­ship between you.
• Im­proves com­mu­nic­a­tion. Dis­cuss­ing fin­an­cial issues can be one of the most dif­fi­cult as­pects of mar­riage. Deal­ing with this at the outset of the mar­riage can strengthen a re­la­tion­ship and sup­port good com­mu­nic­a­tion in the mar­riage.
• Pro­tec­tion of busi­ness part­ners. If you or your part­ner have an in­terest in a family or an­oth­er private busi­ness, the prenup can pro­tect that in­terest and pre­vent dis­rup­tion to the busi­ness if the mar­riage breaks down in the future.
• Pro­vi­sion on death. The prenup can set out what should happen to your assets on your death. This can sup­port the pro­vi­sion con­tained in your will and cla­ri­fy what should happen to cer­tain assets. For ex­ample, the in­her­it­ance pro­spects of chil­dren and grand­chil­dren can be pro­tec­ted in the agree­ment.
• Free­dom to agree your own terms. You and your part­ner may have a cre­at­ive plan for di­vid­ing your assets if you di­vorce. A prenup provides you with the free­dom to agree your own terms without the court im­pos­ing a solu­tion on you.
• Mar­ry­ing for money con­cerns. If you have con­cerns that part of the reason your part­ner wishes to marry you is due to your wealth. If they show com­mit­ment to ne­go­ti­at­ing a prenup that leaves you both with fair and reas­on­able fin­an­cial pro­vi­sion, this may ease your mind.

Read more on How Common Is It to Write a Prenup in the UK?

Dis­cuss­ing a Prenup with Your Part­ner

Dis­cuss­ing a Prenup en­cour­ages open com­mu­nic­a­tion about fin­ances, which is be­ne­fi­cial for any mar­riage. It prompts couples to have honest dis­cus­sions about their assets, debts, and ex­pect­a­tions for the future, laying a solid found­a­tion for mutual un­der­stand­ing and re­spect.

Thus, while no one enters a mar­riage an­ti­cip­at­ing its end, a Prenup is a sens­ible pre­cau­tion, en­sur­ing that, should the path di­verge, both parties are treated fairly and with dig­nity, making a po­ten­tially dif­fi­cult situ­ation a bit easier to nav­ig­ate.

Check­list for Dis­cus­sion about a Prenup

Dis­cuss­ing a Pren­up­tial Agree­ment with your part­ner can be sens­it­ive, but it's cru­cial for en­sur­ing both of you are on the same page re­gard­ing your future to­geth­er. Here's a bullet list to guide you through this im­port­ant con­ver­sa­tion:

• Choose the Right Time: Find a calm, stress-free moment to bring up the topic. It shouldn’t be during times of con­flict or sig­ni­fic­ant stress.
• Ex­press Your Feel­ings: Start by ex­press­ing your love and com­mit­ment. Make it clear that dis­cuss­ing a Prenup is not a sign of mis­trust or doubt about your re­la­tion­ship’s future.
• Focus on Pro­tec­tion: Em­phas­ise that a Prenup is about pro­tect­ing both of you and en­sur­ing fair­ness, not about an­ti­cip­at­ing a break­up.
• Dis­cuss the Fin­an­cial Trans­par­ency: Talk about how a Prenup can sim­pli­fy fin­an­cial mat­ters and pro­tect in­di­vidu­al assets, in­clud­ing in­her­it­ances or per­son­al sav­ings.
• Re­as­sure Com­mit­ment: Re­in­force that your in­terest in a Prenup doesn’t stem from a lack of faith in your re­la­tion­ship but from a desire to take re­spons­ible steps for the future.

Re­mem­ber, how you dis­cuss a Prenup can set the tone for your com­mu­nic­a­tion and de­cision-making through­out your mar­riage. Ap­proach­ing the con­ver­sa­tion with care, re­spect, and open­ness is key.

How to Create a Prenup?

Cre­at­ing a well-draf­ted prenup is cru­cial for its en­force­ab­il­ity. The agree­ment should fully out­line the fin­an­cial ar­range­ments, in­clud­ing the di­vi­sion of assets, treat­ment of pre­marit­al assets, spous­al main­ten­ance, and any other im­port­ant con­sid­er­a­tions.

Key Con­sid­er­a­tions in Pren­ups:

• Full Fin­an­cial Dis­clos­ure: Both parties must provide com­plete and ac­cur­ate fin­an­cial dis­clos­ure to fa­cil­it­ate a fair agree­ment.
• In­de­pend­ent Legal Advice: Each party should seek in­de­pend­ent legal advice to un­der­stand the im­plic­a­tions and fair­ness of the agree­ment.
• Fair­ness and Reas­on­able­ness: Courts are more likely to uphold agree­ments that are fair and reas­on­able to both parties.
• Changes in Cir­cum­stances: Pren­ups should ac­count for po­ten­tial changes in cir­cum­stances, such as the birth of chil­dren or sig­ni­fic­ant shifts in fin­an­cial status.

While a prenup is not a guar­an­tee against legal chal­lenges, a care­fully draf­ted and fair agree­ment stands a better chance of being upheld in court. Courts may set aside an agree­ment if it is deemed unfair or if cir­cum­stances have changed sig­ni­fic­antly since its cre­ation.

Get a Pro­fes­sion­al Prenup

It’s im­port­ant to get a pro­fes­sion­ally draf­ted prenup. However, hiring a lawyer to draft one for you from scratch can be too ex­pens­ive for the av­er­age con­sumer. As a result, many people turn to DIY prenup tem­plates that you can find online.

Using a DIY prenup tem­plate may seem like a cost-ef­fect­ive and con­veni­ent option, but it comes with vari­ous risks that you should be aware of before pro­ceed­ing.

Here are some po­ten­tial risks as­so­ci­ated with using a DIY prenup tem­plate:

• Lack of Per­son­al­isa­tion: DIY tem­plates are gen­er­ic and may not ad­dress spe­cif­ic cir­cum­stances or pref­er­ences. Every couple has unique assets, fin­an­cial situ­ations, and con­cerns. Fail­ing to cus­tom­ise the prenup ac­cord­ing to your spe­cif­ic needs can lead to over­sights and omis­sions.
• In­com­plete or In­ac­cur­ate In­form­a­tion: Legal doc­u­ments re­quire pre­cise and ac­cur­ate in­form­a­tion. DIY tem­plates may not guide you through provid­ing all the ne­ces­sary de­tails. In­ac­curacies or in­com­plete in­form­a­tion could jeop­ard­ise the valid­ity of the prenup.
• Fail­ure to Meet Legal Re­quire­ments: DIY tem­plates are usu­ally not tailored to meet UK re­quire­ments, ren­der­ing the prenup un­en­force­able.
• No Legal Guid­ance: DIY tem­plates lack the ex­pert­ise of a legal pro­fes­sion­al. Un­der­stand­ing legal jargon, im­plic­a­tions, and po­ten­tial pit­falls can be chal­len­ging for in­di­vidu­als without a legal back­ground.
• Risk of Am­bi­gu­ity: Am­bigu­ous lan­guage or un­clear terms in a prenup can lead to dis­putes in the future. Legal pro­fes­sion­als are skilled at draft­ing clear doc­u­ments, re­du­cing the like­li­hood of mis­un­der­stand­ings.
• Lim­ited Con­sid­er­a­tion of Future Changes: Life cir­cum­stances change, and a prenup should ac­count for po­ten­tial shifts in the future. DIY tem­plates don’t gen­er­ally ad­dress changes such as the birth of chil­dren, career de­vel­op­ments, or vari­ations in fin­an­cial status.
• Po­ten­tial for Legal Chal­lenges: A poorly draf­ted prenup is more sus­cept­ible to legal chal­lenges. If the doc­u­ment is un­clear, unfair, or fails to meet legal re­quire­ments, it may not hold up in court if con­tested.
• Future En­force­ment Issues: A prenup draf­ted without legal ex­pert­ise may face dif­fi­culties in en­force­ment later. Courts may be more likely to uphold agree­ments that have been pro­fes­sion­ally draf­ted and meet all legal re­quire­ments.

While DIY prenup tem­plates might seem like a quick solu­tion, the risks as­so­ci­ated with po­ten­tial legal com­plic­a­tions and mis­un­der­stand­ings un­der­score the im­port­ance of having a pren­up­tial agree­ment pro­fes­sion­ally draf­ted to ensure it meets legal stand­ards and ad­equately ad­dresses your spe­cif­ic needs.

💡 Did you know that it's also pos­sible to do a prenup during mar­riage? It's then called a post­nup.

Aatos Helps to Do Prenup Online

Aatos is about to launch its own Prenup product that has been pro­fes­sion­ally draf­ted by our in-house law­yers in line with legal de­vel­op­ments in the UK, in­clud­ing the latest case law.

With our legal ex­pert­ise and our easy to use plat­form, all you need to do is answer some simple ques­tions and a tailored prenup is cre­ated and de­livered straight to your door. It’s ser­i­ously that easy - so keep your eyes peeled for our of­fi­cial launch!

Prenup Brings a Peace of Mind

In con­clu­sion, a prenup is a valu­able tool for couples seek­ing to es­tab­lish fin­an­cial ar­range­ments and pro­tect their in­terests in the event of a di­vorce or dis­sol­u­tion. Seek­ing legal advice, en­sur­ing trans­par­ency, and ad­dress­ing key con­sid­er­a­tions during the draft­ing pro­cess are es­sen­tial steps toward cre­at­ing a robust and en­force­able prenup in the UK.

Re­mem­ber to keep your eyes peeled for our of­fi­cial Prenup launch, which is coming very soon!

Read More

• Be­ne­fits of a Prenup