Bank of Mum and Dad Prompts Pre-nup Boom


Enquiries from parents wanting a pre-nuptial or co-habitation agreement for their children are on the rise.Bank of Mum and Dad Prompts Pre Nup Boom

Deposit Protection

As a growing number of parents provide their adult children with a deposit for their first home, they want to see that fund secured in case of a future relationship breakdown.

James Skinner, a family lawyer at Simpson Millar, explains the trend:

"The divorce courts have always jealously retained their jurisdiction to divide assets and income between a divorcing husband and wife. However, they now broadly hold spouses to the terms of any prenuptial agreement unless there is a very good reason not to do so. This has prompted a huge rise in interest."

"What we didn't expect to see were parents enquiring about pre-nups and cohabitation agreements that will specifically secure any future inheritance or financial donation solely for their offspring, who are about to tie the knot or move in together. They want to ensure any inheritance is left exclusively in the hands of their adult children – not their respective spouses or partners. This is particularly the case where mum and dad have financially supported their children to get onto the property ladder."

Complex Co-habitees

According to James, the trend extends to parents whose child might simply be moving in with their partner. "The law surrounding separating co-habitees is especially complex, so a written agreement here is all-important and parents are now mindful of this when it comes to protecting their investment. As parental support becomes almost invaluable for many first-time buyers, so does demand for parent-sponsored pre-nups and agreements."

The opportunity to specify how certain assets would be divided up outside the general divorce settlement or uncertainty of trust law has wetted the appetite of asset-rich parents, and James has noted a significant rise in this type of enquries since last year.

James says: "The motivation for parents to 'sponsor' these agreements is often different to the reasons why couples themselves decide to put one in place. Parents want to protect assests which they have had a hand in establishing – especially against a future husband, wife, or partner who they might deem to be prone to squandering money or even cheating."


Whether any kind of agreement will stand the scrutiny of court depends on the level of honesty going into it, says James. They often help avoid expensive and acrimonious legal disputes so they are well worth considering. But the reasons for putting one in place, and everyone's financial circumstances at the time, should be completely clear from the outset; there can be no hidden agendas, fortunes or debts.

"The key to any agreement involving property is that is must be fair. In addition, both parties must be represented by their own lawyer before signing it – someone who can explain the implications fully."

Whatever the reasons for putting one in place, these documents should never be signed under pressure says James. "Whatever your position within the relationship don't let anyone pressure you into signing". It should be put in place as far ahead of the wedding or cohabitation as possible so it doesn't put a dampener on the romance or, worse, spoil the relationship entirely.

"Couples are wise to review their agreement every few years to make sure it still represents their wishes and situation; particularly if there have been any significant developments such as the arrival of children."

News Archive

Get In Touch