Our experienced relationship property lawyers answer your questions about contracting out agreements – also commonly known as prenuptial agreements, or a ‘prenup’.
What is a ‘prenup’ and why do I need one?
A contracting out agreement (commonly known as a ‘prenup’, short for prenuptial agreement) enables parties to a relationship to determine how their property would be divided in the event of separation and/ or death.
The main reasons to enter into a prenuptial or contracting out agreement is to ring fence (protect) particular assets and liabilities, and to ensure there are clear expectations as to how they should be divided in the event of separation and/or death. The contracting out agreement can define the division of current and future assets and liabilities.
When should a contracting out agreement be signed? Is there a time limit?
There is no time limit to signing a contracting out agreement. However, it should ideally be signed as soon as possible – prior to the provisions found in the Property (Relationships) Act 1976 applying.
Is the contracting out agreement binding and enforceable?
Yes, provided it complies with the following requirements:
- It must be in writing and signed by both parties.
- Each party must have independent legal advice before signing the agreement.
- Each party’s signature must be witnessed by a lawyer.
- The lawyer who witnesses the signature of a party must certify that they have advised as to the effects and implications of the agreement.
Importantly, the court has the (discretionary) power to set the contracting out agreement aside if not doing so could cause serious injustice.
The agreement must comply with all the above requirements to have legal effect.
Do I need a lawyer for a contracting out agreement?
Yes, you will need a lawyer to satisfy the above requirements and have a legally enforceable agreement.
What does a contracting out agreement cost?
The cost varies depending on the complexity: a more complex situation will likely require additional time for drafting and negotiating the terms of the agreement. The cost of the agreement typically pales in comparison to the possible loss of the asset pool intended to be protected.
If you think a contracting out agreement may be right for you and you’d like to know more, or you’ve been asked to sign a prenup and need independent legal advice, contact our relationship property lawyers today.
Talk to our lawyers
Contact us today for help with your legal matter.