‘Pre-nup’ pact sets out clear rules on asset divvy-up

Consider this before you enter into binding agreements

Edmonds Judd Solicitor

The pandemic has seen people invest theirmoney in a variety of ways. If you and your partner are thinking of buying together, especially if your contributions are not equal, you should consider a contracting out agreement (commonly referred to as a pre-nup/prenuptial, even if marriage is not on the cards).

A contracting out agreement allows couples to set out their own rules and division of assets in the event of separation.

The best time to discuss a contracting out agreement is before you have been together for three years and before you both enter into financially binding agreements — like a mortgage.

A contracting out agreement is best entered at an early stage, but it is never too late to consider one.

If you do not have a contracting out agreement and your relationship ends, the Property (Relationships) Act 1976 will determine how your assets are split. Under this legislation, the home you live in as a couple is generally deemed to be “relationship property” — meaning it is an asset that is likely to be divided equally between you both, even if one party contributed more towards the purchase. ■

A contracting out agreement is best entered at an early stage, but it is never too late to consider one.