How to protect your assets if your partner declares ‘I’m Out!’
Duncan Bannatyne’s acrimonious divorce – he recently tweeted that he’d been “divorced for money” by a “gold digging family”- raises the question “how do you protect your assets if your marriage fails?”
The Dragon’s Den star, who owns a chain of hotels, spas and health clubs, claimed that he would have to lay off staff to pay for his divorce settlement.
Although this is an extreme example of the impact that a divorce can have, it makes sense to think long term and consider what you might lose if your relationship falls apart.
For couples in the honeymoon phase of a relationship, the concept of divorce may seem remote and the thought of drawing up a contract is unromantic. But the harsh reality is that thousands of people do divorce and pre-nuptial agreements – or ‘pre-nups’ – are no longer just the preserve of wealthy businessmen or mega-stars seeking to protect their ever-increasing fortunes.
These legal agreements enable individuals to ring-fence part of their wealth and they are increasingly regarded as the best option for people entering into a marriage to protect their assets.
While pre-nups were previously never considered truly enforceable in England – unlike in neighbouring Scotland – this all changed with the Radmacher judgement in 2010. This asserts that, if a pre-nup is entered into by both parties who are fully informed of all the relevant information – then the courts are likely to uphold it.
As well as managing expectations, pre-nups are a good opportunity to agree solutions before problems arise – which can go a long way to avoiding substantial litigation costs. Agreeing to the distribution of assets in a rational and level-headed manner enables a divorce to proceed with minimal disruption.
Many couples who have gone down this route find that pre-nups can avert potential conflict and trauma by enabling them to dissolve their marriage in a fast and relatively painless manner – avoiding the protracted and emotionally-draining experience in court and the associated stresses it brings.
We all hope that it never occurs, but in the worst case scenario a pre-nuptial agreement is a sensible way to protect your assets.