The increasing importance of Pre-Nuptial Agreements in the UK
The future of pre-nuptial agreements
Towards the end of February the Law Commission is due to publish its long-awaited report on whether pre-nuptial agreements should be legally binding.
We asked a selection of our specialists to comment:
Robert Rhodes QC myBarrister associate
Making pre-nuptial agreements legally binding can only be a good thing in the long run. It will save much heart-ache and expense in protracted court proceedings, which would be to the detriment not only of the parties themselves but also of their children. There will in any event be a safety valve to ensure that one party is not left destitute.
It is absolutely essential that parties to pre-nuptial agreements should be honest with each other about their financial history if they are to have a pre-nuptial agreement. This is because if one partner does not make full disclosure, the other will have a strong argument to have the court refuse to enforce it.
Joanna Toch comments:
Pre-nuptial agreements which are made prior to a marriage and set out who gets what upon divorce have been popular for some time on the continent. In England and Wales the Supreme Court looked at their use in 2010 in a landmark case called Radmacher v Granatino which involved a German heiress and her less wealthy French husband. They had married in the UK. They said such agreement could provide decisive evidence and saw no reason to provide further for the husband's needs further to the agreement, allowing the wife to keep the lion's share of her pre-marital assets.
As matters stand such agreements can be given decisive weight but they do not rule out the court compensating a party to the marriage if there are other factors that might make sticking to the agreement unfair. The factors that would support the agreement holding weight are that each party was legally advised at the time of making the agreement, that each party had made full disclosure of their assets and neither party was under undue pressure - this is why such agreements are usually drawn up well in advance of the wedding.
The Law Commission is looking into reform of the law in this area. Judges pay heed to these agreements if they are properly drawn up and they are of great use to older couples or those on their second or further marriage and who already have substantial assets of their own prior to the marriage and are a valid way of protecting those assets.
Simon Robinson comments;
A pre-marital agreement might seem out of place as part of preparations for marriage, but they are set to become more common amongst all client and not just the rich few. Couples are more willing to face up to the possibility that they may separate and having a plan ready which they've discussed calmly can help to protect both assets and emotions.
In 2010 the Supreme Court looked at pre-marital agreements and indicated that agreements which met certain criteria should be given effect by the courts.
One criterion was that the parties should give full and frank disclosure of their assets and relevant circumstances. If parties want to have the benefit of a pre-marital agreement, they need to be honest with each other about their financial situation. Also, the couple need to make sure that they take expert legal and financial advice and have plenty of time to think through all of the implications off the agreement. With the average wedding costing more than £18,000, booking a lawyer along with your wedding planner is a minor expense that could save you plenty in money and tears later on.
The Law commission will recommend making the position much clearer , and we await their views as to how they suggest this can be done.