How can you Protect your Finances?

We look at key options for protecting your finances, in any stage of a relationship

From Cohabitation to Postnuptial Agreements, we can guide with straightforward advice on what options are available to help ensure your investments, finances or assets are all safeguarded.

What is a Cohabitation Agreement and how does it work?

A Cohabitation Agreement is a legal document between unmarried couples who are living together.

It can set out the ownership of existing assets, financial responsibilities towards each other and how savings and jointly owned assets will be distributed in the event of separation.

Many couples are under the assumption that if they are living together but unmarried or not in a civil partnership, then ‘common law marriage’ protects them in the same way as married couples. However, no such law exists. Couples who live together do not have the same legal rights as married couples or those in a civil partnership.

Cohabitation Agreements also work to protect the economically vulnerable partner.
For example, if you are a parent who has given up your job to care for the children, and the family home is owned in your partner’s sole name, your contributions in looking after the home and raising the children would be recognised as an equal contribution if you were married or in a civil partnership. If you are unmarried or not in a civil partnership, you could be left with nothing, even if your partner had financially supported you for several years.

A cohabitation agreement can provide peace of mind in your relationship. By coming to an agreement before or whilst you are living together, you will:

• have a clear understanding of what your financial commitments are
• avoid misunderstandings regarding your rights and responsibilities as you continue to live together, in particular with regards to ownership of property
• avoid difficulties and disagreements if you split up
• have clear evidence of your intentions should you ever have to go to court

Does a Cohabitation Agreement stand up in court?

Cohabitation agreements are enforceable – provided they are drafted and executed properly. It is essential to get legal advice.

How do Prenuptial Agreements work in Northern Ireland, why should I get one?

Prenuptial Agreements are entered into by a couple prior to marriage, to set out how assets will be divided if they were ever to go their separate ways. The primary purpose is to set out ownership of assets at the start of the marriage and thereby demonstrate intention to keep individual assets separate.

One of the best places to start when creating a prenuptial agreement is to make a list of all the assets you own, both solely and jointly, and then decide on how you would like them to be dealt with in the event of a split. Prenups are not yet legally binding in the UK but will be taken into serious consideration by the courts.

Typical prenuptial agreement terms cover and include:

• Giving you both a say in how assets will be split if you decide to divorce
• Protecting children’s inheritance or assets
• Protecting your inheritance
• Business interests; eg. Allowing one partner to retain full control of business ownership
• Protecting you from your partner’s debt
• Property held in your sole name or in joint names
• Savings held in bank accounts, premium bonds, stocks and shares & pension pots
• Income

What is a Postnuptial Agreement? Can it protect my assets even if I am married?

Postnuptial Agreements are entered in to after the marriage and can cover all the same sorts of assets as a prenup. It is also a good way to review a prenuptial agreement.

Do we need a postnup if we have already signed a prenup?

When there is any concern about the strength of a prenup (for example, if it was only signed the day before the wedding), clients sometimes wish to sign a postnup to reaffirm or review the terms of the prenup. 

Postnups are very useful when there has been a change in circumstances since the prenup was signed (for example, an unexpected inheritance or career change) in order to re-visit the terms of the prenup. 

Postnups are also considered where a couple has had relationship difficulties and want the marriage to continue with financial peace of mind.

How much weight do Pre and Postnuptial Agreements hold in NI Courts?

The Court uphold them provided they have been properly entered into. It is important that each person gets independent legal advice, full financial disclosure is made and that they are not entered into in haste. Never enter in to a prenup thinking that it will not be enforceable. 

Although there is no act of parliament making prenups binding, the Courts follow case law and there is now good law to say that a prenup will be binding if there is:

• Independent advice under no duress
• Financial disclosure
• A decent interval between signing the prenup and the wedding date

What is a Financial settlement and how does it work?

A Financial Settlement is a legally binding decision on how you and your partner will divide your assets and wealth when your marriage ends.

When parties decide they wish to separate, they enter into financial discussions and exchange financial discovery in order to reach a financial settlement outside of the Court arena in the first instance.

Parties should request full and frank discovery from both parties to include proof of respective income, assets and liabilities etc.

If negotiations do not reach a resolution, either party can make an application to the Court which invites the Court to consider any settlement. 

The financial agreement you reach can include;

• Children / spousal maintenance
• Property divisions
• Money, shares, savings and investments
• Division of debt and pensions
• Lump-sum payments
• Personal Belongings, e.g. pets, cars, jewellery

How long can a financial settlement take?

Provided both parties are willing to engage in the negotiation process, this can be achieved fairly quickly. Unfortunately, if one party is unwilling to engage or is slow in providing the required documents, this can cause delay and can result in one party having no alternative but to make an application to the Court in order to progress matters. 

Get in touch

Get in touch with our expert Family Law Team and we will advise you on the first steps and best solutions which will suit you, your family and your future plans.