- Protecting the Bank of mum and dad: nuptial agreements
Protecting the Bank of mum and dad: nuptial agreements
Protecting the Bank of mum and dad: nuptial agreements8th June 2021 - Published by Kuits Family team
If a couple decides to marry, then their financial position changes significantly. In the event of a divorce, one spouse can make claims against property or assets owned in the sole name of the other, irrespective of when it was purchased and how that purchase was funded. The court may decide that the parties’ needs, and most importantly those of any dependent children, require the transfer of such assets either wholly or in part. The same can apply to gifts made to one of the couple by his/her parents and to inheritances received by that party. A pre-nuptial agreement will assist in minimising these consequences.
What can a pre-nuptial agreement ensure?
Such a document would record the parties’ agreement to the exclusion from any arguments or discussions on divorce, on all or part of assets or property acquired by either party before the marriage, thereby giving certain assurances to that party and his/her parents. It could also record that any future gifts and/or inheritances would also be excluded, again providing the parents with the necessary assurances to proceed with any tax planning arrangements they may wish to put in place.
What can a post-nuptial agreement ensure?
A post-nuptial agreement, made after the couple have married, can similarly be used to facilitate tax planning arrangements parents may wish to make, in situations where a pre-nuptial agreement had not been made prior to the couple marrying.