By Tara Grant - 10 Oct 2014
Section 21 agreements, often referred to as "pre-nups" are now
common place. They are an important tool in an estate planning
lawyer's tool kit and are not just for the paranoid, rich and
famous, as perhaps once thought. Having an agreement in place can
bring certainty around issues of property sharing and division. It
can allow couples to get on with the more romantic aspects of their
relationship, without worrying about property entitlements.
What is a section 21 agreement?
It is an agreement entered into under the Property
(Relationships) Act 1976. It allows parties to a relationship,
or those contemplating entering into a relationship, to contract
out of the Act. Couples can make any agreement they think fit with
respect to the status, ownership and division of property.
Who uses section 21 agreements?
- Ordinary young couples, particularly when one party might
be borrowing money from family for the deposit on that first
home.
- Couples who have been there and done it all before and just
want to keep property and finances out of the picture and focus on
companionship.
- Couples where one or both have a child from a prior
relationship and there is a need/desire to identify property for
the protection of that child.
What's involved?
The agreement must meet certain criteria to be binding. One of
the requirements is that each party must be advised by their own
lawyer. The lawyer needs to go beyond a mere explanation of the
agreement and advise on the merits and wisdom of signing (or not
signing) the agreement as it relates to each person's individual
circumstances. Specialist advice from a lawyer with expertise in
relationship property law is a must if you want the agreement to
stand up.
Tara Grant is our section 21 agreement expert. She has recently
returned from maternity leave, raising her twin girls. If you want
to talk to Tara about whether a section 21 agreement is right for
you and your relationship then feel free to call her for an initial
chat.
Contact
Tara
Grant