How can I protect myself without a prenuptial agreement?
If you do not want to enter a pre or post-nuptial agreement with your partner, you can protect your assets as part of divorce proceedings through other means. For instance, getting a solicitor to draft you a Consent Order instead, or setting up a trust which holds assets outside your marital estate.
What is a trust?
Trusts are legal arrangements in which ownership of named assets can be held for the benefit of someone else. These assets are then intended to pass directly to a beneficiary upon your death. All types of assets can be included in a trust such as:
- Stocks and bonds
- Savings accounts
- Life insurance
A major difference and advantage of a trust over a prenuptial agreement is that they don't require the agreement of your soon-to-be spouse. This means that you can create a trust before you get married in order to protect your assets without getting the agreement of your partner. There is also nothing stopping you from having a trust in conjunction with a prenuptial agreement if you wish.
Why would you create a trust?
You can ask a solicitor to draw up a trust to provide protection for your non-matrimonial property. Especially if you:
- Have children from a previous marriage
- Have accumulated substantial wealth and assets
- Are getting married later in life
- Own a business
- Have received a substantial inheritance
Trusts can be particularly advantageous if you have children from a previous marriage whom you want to protect and provide for. They can be named as beneficiaries of your trust. This means that all of your assets transfer over to them in the event of your death. Also, because the trust and not a spouse technically own assets in a trust, they cannot be included in the marital estate if you divorce.
What is a Consent Order?
A Consent Order is a legal document that confirms the agreement that is made between yourself and your spouse during the divorce process affirming how you are going to divide up your assets. Once the court has approved the Order, it is legally binding and cannot usually be changed unless an appeal is upheld by another judge. The consent order will include a rationale for how you have decided to split the assets so that the judge can check that everything is fair and achievable.
If you had a bank account or funds before you got married and you want to keep it as separate property, it makes sense to keep it separate from your spouse's account because if you comingle this money, it becomes marital property which is likely to be divided if you divorce.
Protecting your business
If you don't have a prenuptial agreement and you or your spouse are business owners, it is important to get a valuation of your business before you get married. This way you have a record of the value of your business before appreciation so that the value of it during a divorce is not threatened. The more records that you have of which assets are not marital, whether pertaining to your business or not, will stand you in a better position if it comes to divorce
How can GloverPriest help?
If you do decide not to create a trust or have a pre or post-nuptial agreement, in a divorce when a couple cannot agree on how to divide their assets, it would be up to the courts to decide. This then makes the whole process more expensive and time-consuming.
For help on how you can protect yourself financially our team of specialised family law solicitors is here to provide you with support and advice.