Prenup: 5 Reasons to get a contracting out agreement

Here are five reasons why you should get a contracting out agreement (a.k.a prenup)

A prenup or contracting out agreement offers couples the benefit of deciding how they will divide their property upon separation or death. Without a formal agreement, provisions in the Property (Relationships) Act 1976 will apply, meaning that all property is divided equally in most cases. The trouble is that the Act can unintentionally lead to unfair outcomes. For example, where one partner owned the family home prior to the start of the relationship, the asset would be divided equally upon separation. However, with a contracting out agreement, the couple can decide that the pre-existing property should remain with the original owner.

Getting a contracting out agreement before tying the knot or shortly after commencing your relationship is a wise decision, no matter how much money or assets you have. A prenup is not just for the wealthy. Anyone who wants to protect their assets in the event of separation should consider a contracting out agreement.

Here are five reasons why you should get a contracting out agreement.

1. Safeguard your assets

A contracting out agreement (prenup) allows you to define what happens to your assets if you and your partner decide to part ways. This way, you can ensure the assets you bring into the relationship remain yours in case of a separation.

2. Protect your finances

Without a contracting out agreement, your partner may be entitled to half of your income and assets in the event of a separation. A prenup can help you protect your financial security and ensure that you keep what is yours.

3. Establish financial responsibilities

A prenup can set expectations for each partner’s financial responsibilities during the relationship. Having these responsibilities defined can benefit couples with different financial backgrounds and income levels.

4. Avoid unnecessary conflict

Separations can be a long, complicated, and expensive process. A contracting out agreement can help you avoid costly legal battles and ensure that both parties walk away with what is fair.

5. Provide a sense of security

A contracting out agreement can give you a sense of security and peace of mind. Knowing that you have protected your assets in the event of a relationship breakdown can give you the confidence to start a new life with your partner.

No one wants to consider the possibility of a breakup. Yet it is important to be prepared for the possibility. A contracting out agreement can offer you the safety and assurance you require as you embark on a new stage of your life.