Why inheritance tax means more couples are saying ‘I do’ to pre-nups
Pre-nups are no longer just for the ultra-rich – inheritance tax changes mean more couples are thinking strategically about protecting their wealth, says Amy Harris
Once seen as something only the ultra-wealthy needed, pre-nuptial agreements are increasingly common among everyday couples. With financial independence becoming a bigger priority, and the introduction of inheritance tax changes, more people are turning to pre-nups to safeguard their assets and future inheritances.
Despite this, recent research found that nine in 10 UK couples who are married or in a civil partnership do not have a prenuptial agreement in place. Out of the 22.7mn Brits without a prenup, 60 per cent were aged between 18 and 34, rising to 89 per cent of 35-54 year olds.
Pre-nups in practice
In practice, a pre-nup is a legal agreement both individuals sign before getting married or entering a civil partnership. It lays out what will happen to assets like property, interests in businesses, trusts, savings, or debts if the relationship ends. The aim is to ensure everything is arranged while the relationship is going well, so if things go wrong later, there’s a plan in place.
While prenuptial agreements aren’t legally binding, they can carry significant weight in court if a dispute arises over asset division during a divorce. It is important to ensure that the agreement is fair by meeting the needs of the couple and any children, signed well in advance, and it is crucial for the couple to take independent legal advice for the agreement to be upheld in court.
If one person owns a property before the marriage, the couple may wish to state that the property or a larger share of the property should stay theirs if they separate. A couple may decide that any assets acquired together during the marriage or civil partnership should be divided equally. The agreement can be tailored to suit a couple’s circumstances.
Taking the current economic environment into account, changes to inheritance tax are coming into fruition in April 2027 which means protecting inherited wealth and assets is even more critical.
The present picture
We’ve noticed a growing trend amongst younger couples, who are increasingly considering pre-nups to protect wealth and assets. Younger clients often approach us when they either have or will be gifted wealth from older generations or they themselves are successful entrepreneurs. We’ve also had cases where individuals have received money from a personal injury claim and want to ensure that sum of money is protected for their future needs.
Individuals are now less likely to find the conversation around pre-nups uncomfortable and are more determined to be financially savvy and take sensible steps to protect their hard work or family wealth. Older clients are also increasingly considering pre-nups. We often see couples entering second marriages wanting to protect wealth for their children, as well as parents gifting shares, or money towards a property who want that wealth safeguarded by an agreement.
Inheritance tax planning can sometimes be the prompt needed for couples and their parents to consider a nuptial agreement. For example, in some cases parents will offer a significant gift of money, but with the condition that a nuptial agreement is signed.
If a couple are already married or in a civil partnership, there is also the option of a post-nuptial agreement. Many pre-nups become post-nuptial agreements as it is sensible to review the agreements overtime, as circumstances can change.
We have certainly noticed an uptick in demand for nuptial agreements over recent years, largely due to the concept generally becoming less taboo and individuals paying closer attention to inheritance planning, allowing lawyers to highlight the risks of not having nuptial agreements in place.
While no couple envisions divorce a pre-nup stands as both a shield for family wealth and assets and a compass through potentially stormy waters up ahead.
While a pre-nup may not suit every couple, with inheritance tax changes and a greater focus on financial independence, we expect to see more couples saying ‘I do’ with a nuptial agreement in place.
Amy Harris is legal director in the family team at Brabners Personal