Why Have a Pre-Nuptial Agreement in Scotland?

Getting married? A pre-nuptial agreement can provide clarity about your financial arrangements and may help protect assets you bring into the marriage.

What can a pre-nuptial agreement cover?

A pre-nuptial agreement can set out how financial assets are intended to be treated during and on the breakdown of a marriage. This can include:

• Property owned before marriage
• Savings and investments
• Family businesses and company shares
• Inherited or gifted assets
• Agricultural or family property
• Assets intended to be preserved for children from a previous relationship

The agreement can be tailored to the particular circumstances of the couple.

What does Scottish law say?

In Scotland, the division of matrimonial property on divorce is governed principally by the Family Law (Scotland) Act 1985.

Section 9 sets out the principles which apply to the financial provision to be made on divorce. Section 10 provides that matrimonial property should generally be shared equally unless there are circumstances which justify a different sharing.

Importantly, section 10(6)(a) specifically identifies “the terms of any agreement between the persons on the ownership or division of any of the matrimonial property” as a special circumstance which may justify a different division.

This means that a properly prepared pre-nuptial agreement can have significant legal effect in Scotland.

Are pre-nuptial agreements binding?

Scottish law recognises the contractual nature of pre-nuptial agreements. However, a pre-nuptial agreement should not be regarded as an absolute guarantee of a particular outcome.

Section 16 of the 1985 Act provides a statutory mechanism for challenging an agreement where it was not fair and reasonable at the time it was entered into.

The Scottish courts have considered the significance of pre-nuptial and other agreements in cases including Gillon v Gillon (No 3) 1995 SLT 678 and Kibble v Kibble 2010 SLT (Sh Ct) 5.

The precise terms of the agreement, the circumstances in which it was entered into and the particular assets involved will all be important.

Why is independent legal advice important?

Both parties should have independent legal advice before entering into a pre-nuptial agreement.

Ideally, the agreement should be discussed and negotiated well in advance of the wedding, with both parties having sufficient time to consider the proposed terms and obtain advice.

Full and frank financial disclosure is also important. A well-prepared agreement should clearly identify the assets and arrangements which the parties intend to address.

A pre-nuptial agreement is not just for wealthy couples

Pre-nuptial agreements are not necessarily about protecting vast fortunes.

They can be particularly useful where one party owns a property before marriage, has built up significant savings, owns a business, expects to inherit family property, or wishes to preserve particular assets within their family.

For others, the agreement may simply provide clarity and reduce uncertainty about financial arrangements if the marriage were ever to end.

Planning ahead

A pre-nuptial agreement cannot remove all uncertainty about the future, but it can provide a clear framework for the financial arrangements the parties have agreed.

It is not about expecting your marriage to fail. It is about entering into your marriage with greater clarity about your financial arrangements.

Our experienced family law team at Livingstone Brown can advise you on pre-nuptial agreements and the protection of pre-marital assets, and help you understand how Scottish law may apply to your particular circumstances. Contact us for specialist advice on pre-nuptial agreements in Scotland.