financial agreements

How to protect my assets in a relationship?

How to protect my assets in a relationship?

Reading Time: 3 minutes

It’s 2021, a new start for some, new beginnings and the same old pandemic.

Covid-19 will NOT weigh us down. January is the time to consider that fitness regime, to set some goals, and unsurprisingly for me, it’s when I am frequently asked ‘how do I protect my assets in a relationship?’

1. How do I protect my financial assets?

My advice regarding asset protection is tailored and will depend on your family and financial situation. Whatever your relationship status, do ensure that you know what your financial assets are.

2. Knowing my financial assets

Knowing your assets and your financial resources is so important when considering how to protect them. I understand that talking about money and property with your partner can be difficult, embarrassing and uncomfortable, especially when it is a topic that has been avoided in the past. Not making the effort to know what your financial assets are can have devastating consequences for you (and any children) following a separation. This applies to married and unmarried couples.

3. Not talking about my financial assets

You may be in a relationship where certain conversations, particularly about finances, cause arguments and stress, putting a strain on your relationship. There are certain practical and legal steps you can take to overcome this.

4. Practical steps to safeguard my financial assets

  1. Talk openly about your finances with your partner.
  2. Normalise frequent conversations about your joint assets, finances, income, investments, insurance and protection.
  3. Become involved in the financial discussions that your partner may be having with other experts.
  4. Consider keeping a record of assets are being sold, transferred or registered in another name.
  5. Be wary of signing a document unless you have taken legal and financial advice and understand how this may impact you and your family.

5. Legal steps to safeguard my financial assets

  1. Take legal advice from a family lawyer.
  2. Speak to a financial advisor.
  3. Record your living and financial arrangements in an agreement to protect and safeguard your assets.
  4. Register your interest in any property with the Land Registry by way of a notice of home rights or unilateral notice. The forms can be accessed here.

6. The types of financial agreements to enter into when in a relationship

  1. Prenuptial agreements – enter into these to protect your assets before a marriage.
  2. Postnuptial agreements – enter into these during your marriage – read my post on the advantages and disadvantages of nuptial agreements here.
  3. Cohabitation agreements – agree your financial and living arrangements as an unmarried couple before you settle down together.
  4. Separation agreement – unmarried couples may enter into these agreements following a separation.

7. How do financial agreements help me in a relationship?

  1. Agreements define and protect your assets.
  2. They provide a good financial framework for living together.
  3. Help to avoid awkward conversations about money and property which could put a strain on your relationship.
  4. Can help to alleviate financial issues and pressures during a relationship.
  5. Can be used to show what was intended if there is a dispute down the line.
  6. Avoid litigation and the cost of court proceedings

For more information watch a video I presented with the Investors Chronicle and Financial Times about safeguarding assets. The link to the video can be found below:

https://www.investorschronicle.co.uk/education/2020/11/05/upcoming-women-s-investment-club-12-november-2020/?fbclid=IwAR1sOUZQUUYfHXHpK6QH6flGIKIw38l6Y6cv95EW4jM1qZlZ4QAz_D3vAuo

If you would like to know more about how to protect your assets and entering into financial agreements, please do not hesitate to call or

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Posted by admin in Agreements, Divorce, Finances
Are pre-nuptial and post-nuptial agreements legally binding and what are the advantages of entering into them?

Are pre-nuptial and post-nuptial agreements legally binding and what are the advantages of entering into them?

Reading Time: 3 minutes

The court uses a three stage test when considering whether to uphold the terms of a pre-nuptial or post-nuptial agreement:

1. The agreement must be freely entered into;
2. Both parties must have a full understanding of the terms of the agreement;
3. It must be fair to hold the parties to this agreement.

If you are considering entering into a pre-nuptial or post-nuptial agreement the following may help with the decision making.

Advantages

1. You will make it clear, and agree at the outset of your marriage, as to whether a particular asset is yours alone, or whether you are happy for it to be shared on any future divorce. This provides certainty and avoids lengthy and costly litigation in the future, which in turn saves you in legal fees.

2. You will provide each other with disclosure of your assets before any agreement is reached, allowing you to agree to protect any assets, such as gifts or property received before the marriage. You can also protect your assets from any of your partner’s debts now or in the future.

3. Entering into an agreement should lead to fewer arguments about your finances and will help you communicate about financial matters during the marriage.

4. The agreement will protect any assets ring-fenced for your children and will set out what will happen to your assets on your death, ensuring that your children are taken care of.

5. If you are concerned that your partner wishes to marry you for your money, the agreement should help to put your mind at rest.

Disadvantages

1. The agreements are not legally binding, however, following the Supreme Court decision in Radmacher v Granatino [2010] UKSC 42, the court will uphold a pre-nuptial agreement and a post-nuptial agreement if it satisfies the three stage test above.

2. The agreement cannot anticipate what will happen in the future. If there is a significant change of circumstances, it is unlikely that the agreement will be upheld by the family court. In an attempt to ensure that the agreement is upheld by the court, the document should be reviewed on a significant change of circumstances, resulting in further legal fees and potential upset, and puts a strain on your relationship.

3. The court is unlikely to uphold an agreement that is no longer in the best interests of any children of the marriage. Any agreement reached will be dependent on the circumstances of the children at the time of the divorce.

What is the difference between a Pre-nuptial and a Post-nuptial agreement?

A pre-nuptial agreement is entered into before the marriage and the post-nuptial agreement is entered into after the marriage. The same rules apply to both documents.

Should I be offended by a pre-nuptial or post-nuptial agreement?

It might come as a bit of a shock but try not to be offended. Think of it as a practical step to be open about your finances and how you will communicate this in your marriage. Always take legal advice from a family lawyer to ensure that the agreement is fair and in your best interests.

What if they will not marry me without the pre-nuptial agreement?

Do not feel forced into signing or entering into an agreement without taking legal advice first as you could end up dismissing some of your legal rights. If the other party insists on the agreement, inform them that you will need to speak to a family solicitor before signing and they must allow you the time to do so. Once you have taken advice you will then be in a position to decide whether entering into the agreement is right for you.

If you would like to know more about pre-nuptial and post-nuptial agreements, or if you are considering entering into one

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Posted by admin in Agreements, Divorce