Conversations about pre-nuptial, post-nuptial and cohabitation agreements are rarely easy. Many people worry that raising the subject suggests a lack of trust or an expectation that the relationship might fail.
In reality, these agreements are increasingly viewed as sensible planning tools. They can provide clarity, reduce uncertainty and help couples have open conversations about finances before significant life events such as moving in together or getting married.
Where family wealth or trust assets are involved, there is often an additional reason for considering an agreement. Trustees may encourage beneficiaries to think about how trust assets should be treated in the future and how best to protect the interests of both of the couple and the wider family.
Why trusts can prompt the conversation
Trusts are often established to preserve assets for future generations, protect beneficiaries from future risks or ensure family wealth is managed in a particular way. As part of their role, trustees have a fiduciary duty to act in the best interests of beneficiaries and to consider the long-term protection of trust assets.
This can mean trustees encouraging beneficiaries to consider cohabitation, pre-nuptial and post-nuptial agreements when entering a significant relationship.
While trustees cannot usually insist that a beneficiary enters into an agreement, they can explain the benefits of having one in place and strongly encourage beneficiaries to do so. Trustees may also take relationship risk into account when exercising discretionary powers, particularly when considering significant trust distributions.
The position will always depend on the trust, its history and the circumstances of the beneficiaries. For example, if trustees have made regular distributions over many years it may be difficult for them to refuse to do so.
However, where trustees are concerned about preserving trust assets, and/or it is clearly envisaged that funds will be distributed at a particular age or stage of life, they may feel it is entirely appropriate to encourage beneficiaries to consider putting suitable arrangements in place before making distributions or loaning any funds in trust to beneficiaries.
How trustees can raise the subject
Trustees often worry about how to start the conversation without creating tension or appearing to interfere in a beneficiary's personal life.
The key is to focus on responsible stewardship rather than relationship breakdown.
A trustee might say:
"As trustees, we have a responsibility to think about the long-term protection of trust assets and the interests of all beneficiaries. We're not suggesting that anything will go wrong, but where trust assets, family support or trust-owned property are involved, we think it's sensible to consider whether a cohabitation agreement or pre-nuptial agreement might be appropriate.
We'd encourage you to take specialist advice so that everyone understands their position and can make informed decisions."
This approach makes it clear that the suggestion is motivated by prudent planning rather than mistrust.
A robust letter of wishes from the settlor can also assist. While not legally binding, it can provide trustees with comfort if the settlor has expressed a desire for family wealth to be protected through appropriate agreements before significant distributions are made.
How couples can approach the conversation
For beneficiaries and their partners, the challenge is often how to discuss the subject constructively.
The most productive conversations are usually those focused on fairness, transparency and certainty rather than protection from one another.
If you're living together
A cohabitation agreement can help clarify issues such as property ownership, financial contributions and future expectations.
One way to begin the conversation might be:
"Since we're living together in my home, I think it would be sensible for us to put a cohabitation agreement in place so we both understand where we stand.
As you know, the property is owned by, or linked to, a trust set up by my family. The trustees have asked me to think through what that means for us and whether we should put something in place.
I hope none of this ever becomes an issue, but I'd rather we talk about it openly now so we both feel protected and clear. I don't want either of us to make financial decisions we might regret later."
If you're planning to marry
For engaged couples, a pre-nuptial agreement can be presented as part of sensible financial planning.
For example:
"As we're planning to marry, I'd like us to think about a pre-nuptial agreement — something we can agree now, sign and hopefully never need to revisit.
As you know, my family's trust arrangements mean I've been encouraged to consider whether an agreement would be appropriate. More importantly, I want us to be open, fair and on the same page before we marry.
This isn't about expecting things to go wrong. It's about protecting both of us, avoiding uncertainty and making sure family interests are considered in the way we would want."
If you're already married
For married beneficiaries, a post-nuptial agreement is the most appropriate option.
A conversation might start:
"I've been advised that married beneficiaries of trusts should consider a post-nuptial agreement. I understand this is because these agreements are becoming increasingly important and can help provide clarity if circumstances change.
I don't see this as planning for things to go wrong. I see it as a way of being clear, fair and responsible, particularly given the trust arrangements and wider family interests.
It may help avoid uncertainty in the future and make sure any decisions we make now are properly understood by both of us."
Conclusion
Whether the conversation is initiated by trustees or by a couple themselves, the objective should be the same: creating clarity, avoiding uncertainty, and making sure that there will be a fair outcome for all concerned, without unnecessary expenditure on legal fees that invariably results from not having suitable agreements in place. This is particularly so where trusts or trust assets are offshore, sometimes with multiple countries involved, making the legal position more complex and therefore any disputes more expensive to resolve if they arise.
Trustees are often seeking to protect trust assets and fulfil their duties responsibly. Couples are usually looking for reassurance, understanding and to avoid the financial vulnerability from a fear of losing assets or being left with nothing if things go wrong.
Viewed in that light, cohabitation agreements and nuptial agreements are not about preparing for a relationship to fail. They are about encouraging open conversations, managing expectations and giving everyone confidence that important issues have been discussed honestly and thoughtfully before problems ever arise. When done well, having an agreement in place can support the success of a relationship rather than the reverse.
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