There’s no room for secrecey when you sign a pre-nuptial agreement - Sophie Pike

The rate of marriage in Scotland has slowed significantly since the highs of the 1940s, with a steady decrease from the ’70s onwards.

The percentage of marriages ending in divorce (not including cohabiting couples who separate) is estimated at 33-45 per cent, much higher than around 25 per cent in the 70s. In addition, the Office of National Statistics reports that over the same period, the average age of people getting married in Scotland has risen from early-20s to mid-30s.

Due to this increased average age, many people will have accrued assets (pension rights, property, savings or shares) prior to marriage which they want to protect in the event that the relationship breaks down.

Whilst no-one enters into a marriage contract anticipating it will end in separation and divorce, it is sometimes unavoidable. As a result, many couples take a pragmatic approach by considering a pre-nuptial agreement prior to saying “I do”.

Sophie Pike is an Associate, Balfour+Manson

Pre-nuptial agreements are legally binding and enforceable in Scotland, subject to legal principles of capacity and consent, and can be used to circumvent the jurisdiction of Scottish courts in the event of a separation. It is also possible to enter into a similar “post-nuptial” agreement after marriage.

Pre-nuptial agreements are most often used to “ring-fence” property a person has built up in their sole name prior to marriage, i.e., to identify that property, and contract parties into an agreement that it will remain non-matrimonial regardless of what financial decisions are made together during marriage.

Some agreements go further, attempting to prevent the accumulation of any matrimonial property during the marriage. Others will narrate an agreed position on how property will be divided in the event of separation.

Pre-nuptial agreements can be tailored to a couple’s circumstances. They can be very useful and provide a degree of reassurance, especially for those marrying in later in life, with an interest in a family business or their own company, inherited wealth or perhaps with children from a previous relationship. However, due to their contractual nature, it's important to take legal advice and have open discussions about finances well in advance of marriage to avoid any later challenges to the validity of the agreement.

Whilst such agreements are binding, there is provision within the Family Law (Scotland) Act 1985 allowing a court to vary or set aside an agreement if it wasn’t fair and reasonable when entered into.

The onus is on the person seeking to challenge the agreement to prove this. Arguments around the overall circumstances of entering into the agreement, undue influence or duress, unfair advantage, the nature, and quality of legal advice provided and timescales for taking advice can all be considered. The key point is when entering into a pre-nuptial agreement, there is no room for secrecy.

Being open, honest, and forthright with financial information, leaving plenty of time in advance of a wedding for legal advice and negotiations and understanding that neither party should feel in any way compelled to sign for fear of the wedding not going ahead will help in ensuring your agreement is binding, if you need to rely on it one day.

In the best-case scenario, you’ll sign the agreement, put it away and never look at it again. If your relationship does break down, knowing you have entered into an agreement might assist greatly in your ability to move forward amicably – and with financial certainty.

​Sophie Pike is an Associate, Balfour+Manson