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  • Overview

    Family lawyers are not regularly associated with the subject of wealth preservation. We are seen as a distress purchase, and at times an expensive one, when a relationship breaks down and financial matters need to be resolved.

    In fact we can be involved at a much earlier stage in a relationship, which some studies suggest can help prevent it breaking down but also mean that if it does, there is a clear agreement as to how financial matters are to be dealt with. This can save a huge amount of financial and emotional cost at a difficult time.

    There are schools of thought, supported by research, that if parties enter into an agreement at the start of the relationship, it is a good indicator that they can communicate, that they both know where they stand and it can prevent the relationship breaking down. Whilst that itself is not within our expertise, it follows that communication helps any relationship.

    An asset that many people want to protect is family wealth - money or other assets provided by family members, during their lifetime or on death, as a gift to one party. It is hard to accept that such family wealth should move outside the family if the relationship breaks down.

    Pre-nuptial agreements

    Before a couple get married they can enter into a pre-nuptial agreement. Following the Radmacher case, which was widely publicised, the Courts in this country are much more concerned with the terms of a pre-nuptial agreement in the event of a divorce. Whilst not binding per se in this country, they are binding in a number of other European countries. Providing certain conditions have been complied with, such as full disclosure, both parties having had legal advice, neither party being under pressure to enter into the agreement and it not being unrealistic, the Court can be persuaded to uphold the terms of the agreement. A pre-nuptial agreement sets out clearly the parties’ intentions in the event that their relationship comes to an end, and this can be by divorce or death. If you are the party with the greater wealth, be it earnt, inherited or gifted wealth, you are best protected with an agreement prior to the marriage.

    Post-nuptial agreements

    In the event that an agreement hasn’t been signed before the marriage, it is still possible to enter into an agreement after the marriage. This is often referred to as a post-nuptial agreement. Again the Court would want to see that there had been full disclosure before the agreement was made, that it was not completely in one party’s favour, that each party had received independent legal advice and that neither party had been put under pressure to enter into the agreement. Following case law, post-nuptial agreements are more likely to be upheld and can be used to protect family wealth, whether gifted or inherited.

    Declaration of trust

    In situations where couples aren’t intending to get married but are going to live together, it is very important that their intentions as to any property they are purchasing and living in are recorded. In cases of property ownership disputes where the parties are unmarried, the Court’s first concern is the title to the property. If that doesn’t reflect the true ownership position, the Court will consider any subsequent documents that do. It is very hard to argue against the title, unless there is a subsequent declaration of trust or cohabitation agreement. In an ideal scenario when you purchase a property, the transfer deed or declaration of trust should be clear as to how you own it, and it is advisable that this is supplemented by a cohabitation agreement. If one party is putting in a greater amount to the purchase price of the property, or their parents are assisting in the purchase, thought should be given to how those contributions would be recorded. If parents or family members are gifting a sum, would they be happy with some of that gift passing to the other party in the event of a breakdown in the relationship? There is also still a common misconception that there is some protection as a “common law spouse”, but no such thing exists in the eyes of the law. You are either married or you are not, there is no “in between”.


    These agreements can avoid the need for costly legal arguments in the future and may even help prevent the relationship breaking down in the first place. Financial arrangements can be a source of contention in any relationship. If there is a clear agreement, recorded in writing as to those financial arrangements, there is less need for argument.

    If you would like to discuss these areas of wealth preservation further, please do not hesitate to contact Helen Waite on 01892 701213

    For more information on how the Court resolves a financial dispute, read our infographic: How the Court resolves a financial dispute.

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    Dealing with the legal aspects of a relationship or family breakdown requires a thorough knowledge of the law and a tactful, understanding approach.

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