Getting married is, or should be, one of the happiest days of anyone's life. But it is a sad fact of life that many marriages end in divorce. Frequently the divorce process involves an acrimonious split of assets, which leaves neither party happy and lawyers much enriched.
Prenuptial agreements can be an effective way of avoiding a lengthy battle over assets and are finding increasing favour. They typically detail exactly what each party is bringing into the marriage and what each party will take out of it in the event of a breakdown. They are generally binding and will be upheld by the courts as long as they have been negotiated with full disclosure of assets by each party.
'Prenups' can never be said to be a romantic way of cementing a relationship, but the negotiating process can reveal differences of opinion which might suggest incompatibility and make it unwise or impossible to marry. It might be useful to find out beforehand if that is the case. Indeed, in some countries it is not possible to get a marriage licence unless issues such as children, careers and finances have been discussed and agreed upon in some detail. Often partners get a nasty shock when fundamental differences on these matters come to light after the nuptials.
An alternative to negotiating what might be an embarrassing agreement prior to marriage would be for one or both partners to settle assets into trust.
Wealthy individuals frequently create trusts upon marriage to safeguard assets accumulated prior to marriage for future generations. Many are happy to look after an estranged spouse to some degree but do not particularly see why large sums should be awarded to the spouse from assets that were either inherited - and therefore might rightly be considered as family assets to be preserved for children and grandchildren - or from capital which was accumulated without the assistance of the spouse and prior to their meeting or marrying.
In simple terms, anything transferred to a trust is no longer the property of the transferor (settlor), so it cannot be included within his wealth for the purposes of paying a creditor, whether it is a business debtor or an estranged spouse. In practice, that argument only goes so far. Many matrimonial courts simply ignore the existence of the trust and award to the other side on the basis that assets held in trust could be available to the settlor if required in order to meet his financial obligations if he is unable to otherwise do so.