Growing numbers of couples are turning to prenuptial and postnuptial agreements as a practical way to safeguard family wealth amid rising lifetime gifting and increased inheritance planning. With The Times reporting that four in ten marriages in the UK end in divorce, it is unsurprising that more families are exploring nuptial agreements and trusts as part of their long-term financial strategy.
Although not automatically legally binding in England and Wales, these agreements carry considerable weight when drafted correctly. A Supreme Court decision in 2010 ruled that courts should take prenups into account, as long as they had been entered into freely by both parties, there had been a "full and frank" disclosure of their assets, each party had independent legal advice, and the agreement met both their needs and was not unfair. For prenups, we recommend signing at least 28 days before the wedding to avoid suggestions of pressure; if timing is tight, a postnuptial agreement may be more appropriate. Postnups can be entered into at any time after marriage.
Nuptial agreements are commonly used to ring‑fence inherited or gifted wealth. They can include a comprehensive schedule of each party’s assets and debts, provisions protecting pre‑marital property, terms dealing with assets acquired during the marriage, and arrangements relating to future earnings, business interests, pensions, savings, investments, inheritances and trust interests. The level of detail is entirely up to you, and the agreement can be as simple or as sophisticated as your circumstances require.
Trusts are also used to protect assets and manage inheritance tax exposure. These are on the rise too, especially following changes that will bring pensions into taxable estates from 2027. Although helpful, trusts do not guarantee protection in divorce proceedings, as courts put fairness first when deciding who gets what during said proceedings.
Both nuptial agreements and trusts involve cost and careful planning, but when used appropriately, they remain highly effective mechanisms for preserving family wealth across generations. If you would like advice on either nuptial agreements or trusts, our family and tax and trusts teams at Stevens & Bolton are here to help.
