Legal insight: Tying the knot without unravelling the business
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With nearly one in three marriages in the UK ending in divorce, the emotional and financial impact of marital breakdown is unfortunately an all-too-common reality for many.
For families involved in business together, the risks stretch beyond personal consequences; a divorce can ripple through a family enterprise, threatening stability, ownership, and control.
That’s why more family businesses are turning to pre-nuptial agreements – not as a sign of mistrust, but as a practical and protective step that safeguards their legacy.
Pre-nups: A business essential, not just a romantic taboo
While pre-nuptial agreements might seem incompatible with the romantic nature of wedding planning, they’ve quietly become an effective tool among couples with significant assets, particularly those connected to a family business. Such agreements provide clarity and security, offering both partners and their extended families a sense of reassurance about what happens if things don’t go as planned.
Family businesses face unique risks during divorce proceedings. Without clear legal protections, a spouse with no direct involvement in the business could potentially gain shares or influence decisions. Worse, disputes over business-related assets can lead to protracted legal battles, destabilising the company and harming relationships between family members. Pre-nups seek to avoid this outcome by defining financial boundaries and intentions early on, allowing the business to operate without disruption regardless of what happens in a marriage.
Preserving privacy and peace of mind
In addition to safeguarding business interests, pre-nups can also play a key role in protecting a family’s privacy. For high-profile family enterprises, the disclosure of extensive financial information during a contentious divorce is a material concern. The fact that there is currently a real push within the English Family Court for transparency, resulting in more cases being heard publicly, only heightens this concern given the risk of damaging media exposure.
Pre-nups often incorporate confidentiality clauses together with provision for any dispute on divorce to be determined out of Court in a bid to ensure financial and business matters are kept private. The aim, however, is of course to avoid a dispute altogether by laying out a clear and mutually agreed framework for financial separation, thereby reducing the risk of contested proceedings and resolving matters more amicably if the relationship ends.
Making pre-nups the norm in family businesses
Raising the subject of a pre-nup with a future spouse isn’t always easy. Understandably, many people worry that it signals a lack of trust or commitment. However, in the context of a family business, it’s helpful to reframe the conversation. For example, establishing a standard family policy which is put in place by the family office, founding shareholders or trustees assists in facilitating those discussions early.
When pre-nups are positioned as part of responsible, long-term planning – not unlike taking out insurance – they are easier to accept. Many couples even find that having these early conversations fosters transparency and trust, providing a stronger foundation for their future together.
This is especially important as many people now marry later in life, often bringing existing wealth, children, or business assets into the union. A pre-nup allows these interests to be respected and protected from the start, without requiring the Family Court to intervene later with decisions that may not reflect the couple’s intentions.
The cost of not preparing
Ignoring the risks of divorce can have serious financial and emotional consequences for family businesses. Without a pre-nup, divorce proceedings can lead to the risk of forced sales, share transfers, the involvement of an ex-spouse in a business or prolonged litigation. These outcomes don’t just impact the separating couple – they can damage the wider family, affect employees, impact the business’ cashflow or decision making and shake investor confidence.
On the other hand, proactive planning can help everyone involved emerge from a separation with minimal financial disruption and a clear understanding of their financial future.
Crafting a fair and enforceable agreement
For a pre-nup to be upheld by the English Family Court, it must meet certain legal standards. Crucially, it must be fair to both parties. This means the financially weaker spouse must be left with sufficient financial security after divorce.
Full financial disclosure is essential. This includes sharing information about current wealth, as well as future expectations like inheritances – at least to the extent known at the time. Each party must also have independent legal advice from experienced solicitors who can ensure they understand the terms and the rights they’re waiving.
When these conditions are met, the Court is far more likely to respect and enforce the terms of an agreement. It’s a process that requires sensitivity and care – but one that offers substantial long-term benefits.
Planning ahead for stronger family enterprises
In today’s world, where personal and financial lives are often deeply intertwined, pre-nuptial agreements are no longer reserved for the ultra-wealthy. They are fast becoming a key tool for responsible family business governance.
By establishing a “pre-nup as standard” approach, families can reduce uncertainty, minimise conflict, and protect their businesses for future generations. As with many aspects of business planning, it’s not about expecting failure – it’s about preparing wisely for every possibility to ensure resilience and security for years to come.
This article was first published in Professional Adviser in August 2025.
