Wealth Protection

Wealth Protection is the process of putting arrangements in place which protect an asset or capital should a relationship end.

In bringing together the expertise of our family and private client teams, you can have peace of mind that you can preserve and protect your assets and future inheritance prospects, ensuring your secure financial future.

Why is Wealth Protection for me?

Being pragmatic and legally savvy are the best ways to respect yourself and your wealth; whatever that wealth may be.

Whether you have property or a farm, wealth in trust or own a business, then ring-fencing that wealth from a potential claim on divorce or separation is key. It can also protect expected future wealth, like inheritance or gifts and can help you plan your financial future.

Pre-nuptial agreements

A pre-nuptial agreement is an agreement between a couple entered into prior to a marriage that seeks to regulate what they intend to happen to their financial affairs if the marriage were to end. A post-nuptial agreement is simply a document entered into after the marriage has taken place, to achieve the same outcome.

"Getting married; Pre-nuptial and Post-nuptial agreement" (article 2min read)

A pre-nuptial agreement is an agreement between a couple entered into prior to a marriage that seeks to regulate what they intend to happen to their financial affairs if the marriage were to end. A post-nuptial agreement is simply a document entered into after the marriage has taken place, to achieve the same outcome.

The aim is to reduce disputes should a married couple separate, by agreeing in advance what their financial relationship would look like on separation and what would be ‘off the table’ when splitting matrimonial assets. The pre-nup or post-nup, like any legal document, can be as narrow or as wide as the couple wish; it can simply name a specific asset which they agree would never be shared on divorce, like a family farm, land or partnership, or go into greater detail.

Pre-nups have historically had a stigma attached and have long been seen as the reserve of the super-rich. But in recent years they have rightly crept their way into succession and inheritance planning discussions as a useful tool for couples, and their families, as a way to preserve assets for generations to come.

If you are thinking of gifting an asset or wealth now, then exploring this option is vital. A pre-nup or post-nup can.

There are many reasons why a pre/post-nuptial agreement may be beneficial, including:

  • Preserve assets for children from a previous relationship
  • Protect capital or assets that have been inherited
  • Give clarity over finances if the relationship were to end
  • To ensure you retain control of a business
  • To avoid being liable for your partner’s debt
  • To protect farming partnerships

They are the insurance policy for a rainy day.

Their legal status is also clearer than in years past; if certain prescribed requirements are followed in the process of preparing the document, then on balance the court will uphold them as a clear demonstration of the intention of the two people entering into it. Whilst that is not quite the ‘automatically binding’ guarantee that some may expect, a well-drafted and professionally handled pre-nup should hold up to even the strictest judicial scrutiny without concern.

Top Tips;

    • Don’t write off a pre-nup as ‘not for us’. The reality is that everyone should consider a pre-nup if there is an asset, business, partnership or possibility of inherited wealth; it helps you decide how you would want to deal with things should you ever separate. Doing this when the sun is shining is far easier then when the clouds of separation have descended.

 

    • Have the discussion early; the more open you can be, and the more you can agree in advance, will smooth the process and can reduce the legal costs in drafting it.

 

  • Get legal advice as soon as you can; bespoke and tailored advice is key, without the time pressure of an impending wedding. That advice should include wills which mirror what the agreement achieves, and should be part of wider succession and inheritance planning where needed.

Want to know more? Please get in touch with Partner and Head of Family Marjha Golding-Evans on 01633 603107 or Marjha.Golding-Evans@rdplaw.co.uk

Cohabitation agreements

A cohabitation agreement is a written contract drawn up by an unmarried couple who are living together outlining what would happen to their financial affairs if the relationship were to end. The agreement can be made at any time, whether at the start of them moving in together or after many years of cohabitation.

"Living Together; Cohabitation agreements" (article 2min read)

A cohabitation agreement is a written contract drawn up by an unmarried couple who are living together outlining what would happen to their financial affairs if the relationship were to end. The agreement can be made at any time, whether at the start of them moving in together or after many years of cohabitation.

You might ask; why do we need this, when we are common-law husband and wife? It is crucial to know there is no such thing as a common law spouse; you’re either married or not. And if you are not, then getting advice on the financial rights and property interests you may intend, or not, to convey to your cohabiting partner is essential.

An expertly drafted cohabitation agreement can mean that upon separation, potentially expensive and protracted disputes are avoided (or at the very least minimised) It can give a couple some certainty and peace of mind that each party will be treated in accordance with the terms of a carefully negotiated agreement.

They are the insurance policy for a rainy day.

A cohabitation agreement can cover things such as:

  • Who pays for what; the financial arrangements agreed upon, whilst living together, such as.g. how each person will contribute to household outgoings such as rent/mortgage and utility bills.
  • Who owns what assets and property at the time the agreement is entered into, and in what proportions.
  • Whether or not they have a clear intention that contributing to a mortgage or a properties maintenance will, or will not, create a financial interest in it. In short, whether paying towards a house you both live in will, for example, acquire a right to share in its value.
  • What each party’s debts are (e.g. credit card/loan liabilities and finance agreements) at the time the agreement is entered into and whether they are the sole liabilities of one party or whether they are joint debts.
  • Whether any gift, inheritance or unexpected good fortune (such as a lottery win) received by either party should remain the separate property of that party upon separation.
  • Pension and death-in-service benefits – some pensions may give the opportunity to make provision for a cohabitant partner via pension benefit nominations, also death-in-service benefits nominations can be covered.
  • How property, assets, and personal possessions should be divided and how joint debts and bank accounts are to be dealt with in the event the relationship breaks down.
  • Potential major life events/changes such as the death of a party, a party becoming ill, and the needs of any future children of the relationship.
  • Who will take ownership of any pets acquired during the relationship upon separation.

Many couples find the process of discussing what would go into a cohabitation agreement gives them a chance to carefully consider and discuss how living together is going to work, both financially and on a practical day to day level by them.

Their legal status is also clearer than in years past; if certain prescribed requirements are followed in the process of preparing the document, then on balance the court will uphold them as a clear demonstration of the intention of the two people entering into it. Whilst that is not quite the ‘automatically binding’ guarantee that some may expect, a well-drafted and professionally handled cohabitation agreement should hold up to even the strictest judicial scrutiny without concern.

If you plan to own property jointly with another person, whether you are in a relationship or not, then a cohabitation agreement should be made in addition to a declaration of trust. This is crucial, alongside a well drafted will.

The financial support which is given to a child is a complex area; the path you take also differs depending on whether you were married or not.

Unlike the financial arrangements for cohabiting couples, arrangements recorded in such an agreement for children will not be binding and cannot be enforced as contractual terms. Whilst you may try and set out your intentions for your child/ren and their financial support, it remains open for a parent to make a claim for financial provision for their child against the other parent under Schedule 1 of the Children Act 1989 or for child maintenance via the Child Maintenance Service against a non-resident parent.

Make an Enquiry

Meet the Team

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Marjha Golding-Evans

Partner

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Hannah Curtis

Trainee Solicitor