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EVERYDAY LAW: The benefits of a prenup

Cecil McCarthy

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Some of the reasons given for the desirability of prenuptial agreements include the following:
• they will protect assets acquired before marriage
• they will preserve businesses
• they can protect high earners and can recognise the weight of the party’s contribution
• they will ensure that children of previous relationships are not disadvantaged by permitting them to inherit.
In Barbados, interest in prenuptial agreements tends to be highest among those persons who are entering a second or later marriage and who wish to preserve their property for their children or who may not want to lose assets built up over a long period of time prior to marriage.
Marriage can have a significant effect on the future of one’s property, whether that marriage ends in divorce or is broken by the death of one of the parties.
On a dissolution of marriage the High Court has significant power to reallocate property. This right has been granted by the Family Law Act and the accepted view of the law is that a pre-nuptial agreement cannot take away the power granted by statute in this regard.
Another significant statutory provision that can affect married couples is the legal right of a testator’s spouse under the Succession Act. Part X of the Succession Act gives a surviving spouse a share of the deceased’s estate as a legal right. This share will often be a half-share of the estate.
Surviving spouse
If no will has been made, the surviving spouse will also be entitled to a significant share of the estate of the deceased. Where a party has built up his/her assets over the years the possibility that children may not benefit or not benefit significantly from them, is a source of concern.
However, it should be noted that under Section 95 of the Succession Act a “spouse’s legal right may be renounced in an ante-nuptial contract made in writing between the parties to the intended marriage or may be renounced in writing by the spouse after marriage and during the lifetime of the testator.”
Where a party is entering a second marriage and has already acquired significant assets it is highly recommended that if he wants to preserve those assets for his children, that he insists that the other party enters into a prenuptial agreement renouncing the legal right under section 93 of the Succession Act.
Of course, either party to the intended marriage may take advantage of Section 95 of the Succession Act if the other party can be persuaded to renounce the legal right.
The effect of an agreement under Section 95 is that it would permit a spouse the freedom to make a will disposing of his property without the concern of the legal right of the surviving spouse.
• Cecil McCarthy is a Queen’s Counsel. Send your letters to: Everyday Law, The Nation, Fontabelle, St Michael. Send your email to [email protected]