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With nearly half of marriages ending in divorce, it makes sense to consider what will happen to the family home, your savings, your pension, your income and even your beloved CD collection if your marriage breaks down and ends in divorce.

When celebrities divorce, the papers are full of speculation on who will get what and more importantly, whether there was a Pre Nuptial Agreement. But are Pre Nuptial Agreements only relevant for the rich and famous or can they also protect someone like you?

Generally speaking when a couple divorce, their assets whether in joint names or one party’s sole name, are thrown into the “matrimonial pot”. The starting point for any division of these assets is 50:50 however the court will take other factors into account including the length of the marriage, standard of living during the marriage etc and of course, the needs of any children when deciding whether an equal split is appropriate.

While a Pre Nuptial Agreement is not absolutely “water tight”, it is a factor the court will take into account and entering into such an agreement would be considered ”conduct” by the parties. A properly drafted Pre Nuptial Agreement made at least 28 days before the marriage with a schedule of means attached on which each party has received independent legal advice can provide valuable evidence of each party’s wishes in the event their marriage breaks down.  Certainly, recent case law seems to suggest that the courts are giving increasing weight to Pre Nuptial Agreements.

So should you consider a Pre Nuptial Agreement? If you have inherited money or property or simply worked hard to build up your wealth while single, you may wish to protect your assets in the event the marriage ends in divorce. A Pre Nuptial Agreement is of particular relevance when one or both parties have been previously married or have children from another relationship.

Think you’re safe if you are only living together?  Think again.

While the concept of a common law husband and wife is a myth, certain rights can arise when a couple are living together. Generally speaking, a cohabiting couple without children has no claim on each other’s income, pension, property or other assets.  There is however an exception and it usually relates to the “family home”. Take the example of Charles and Camilla who have been living together for many years. When their home was purchased, Camilla was in arrears with her credit card payments and had a poor credit rating so the bank would not provide a mortgage to both she and Charles. As the mortgage was solely in Charles’ name, the property had to be purchased in his sole name as well. Camilla was not too concerned about this and gave her savings to Charles towards the deposit. Ten years later, Charles and Camilla decide to separate and the property is still held in Charles’ sole name. Does Camilla have an interest in it? The answer is yes, even though the property is held in Charles’ sole name. Camilla may not hold the legal interest but she has a beneficial interest by virtue of her contribution towards the deposit when the property was purchased. Charles of course may dispute this and the resulting litigation can be very expensive. If a Declaration of Trust, setting out each party’s interest in the property had been drawn up when the property was purchased, this litigation could have been avoided.

What is the situation if your partner is planning to move into your home?  Will he or she gain a financial interest?  Will I have to pay her something if we separate?  Take the case of Elizabeth and Phillip. Phillip purchased his home in 1990. In 2001, he met Elizabeth and they decided to live together. Phillip continues to pay the mortgage and household bills from his own bank account and Elizabeth gives him £300 per month towards the household expenses and buys the food every week. In 2005, Phillip and Elizabeth separate – does Elizabeth have a beneficial and therefore financial interest in Phillip’s property?  The answer is possibly but not guaranteed. To prove a beneficial interest, Elizabeth will either need to show that she has made a direct financial contribution towards the mortgage or perhaps towards improvements that increase the value of the property for example building a conservatory or show that there was a common intention between she and Phillip that she has an interest in the property and that she acted to her detriment in relying on that common intention. Say for example however that prior to moving in with Phillip, Elizabeth had a tenancy and had been living in a local council property for many years. Elizabeth was concerned about giving up her tenancy to move in with Phillip but Phillip assured her that it was fine “ because his house would belong to both of us”. On hearing this, Elizabeth was happy to let go of her council tenancy and move in with Phillip.  Phillip’s comment show a common intention between he and Elizabeth that she would have an interest in the property and by giving up her council tenancy, Elizabeth has acted to her detriment in relying on Phillip’s promise. It would appear in the circumstances that Elizabeth has a beneficial interest in Phillip’s property but how will she prove it if Phillip denies ever making his comment?  This is a very expensive and sometimes complicated area of law. Couples will often have joint bank accounts and their finances can overlap over many years making it difficult to establish who was paying the mortgage or who paid for improvements to the property.  

In these situations, a Cohabitation Agreement made prior to moving in together will allow a couple to evidence their intentions in the event their relationship fails or one party dies.

Couples who have children together can also make a claim against their partner under Schedule 1 of the Children Act 1989 for a lump sum or for the transfer of the family home into their name if the child or children will be living with them. Take the example of Edward and Sophie. They have been living together for 10 years in a property that Edward bought 15 years ago and have one child, Thomas aged 9 years. Sophie has not worked since Thomas was born and has made no financial contribution towards the mortgage or improving the value of the property. Sophie also cannot show any evidence of a common intention between she has Edward that she has an interest in the family home. Edward and Sophie decide to separate and Edward asks Sophie to leave “ his house”. What options are available to Sophie?  If Thomas will be living with Sophie, she can apply under Schedule 1 of the Children Act. Edwards has no savings only the house, so she applies for the property to be transferred to her until Thomas is eighteen. At that time, the property will revert back to Edward.


While obligations towards children cannot be excluded, Pre Nuptial and Cohabitation Agreements can provide peace of mind whether you are tying the knot or simply moving in together and the cost is relatively inexpensive when compared to the costs of litigation.