Pre Nuptial Agreements

Since a landmark decision by the Supreme Court in October 2010 there has been an increase in couples seeking to enter into Pre-Nuptial Agreements ahead of their marriage.  Although there is no new legislation making Pre-Nuptial Agreements legally binding, the Supreme Court suggested in 2010 that courts should give effect to Pre-Nuptial Agreements if these are freely entered into by each party with a full appreciation of its implications, unless in the circumstances prevailing it would not be fair to hold the parties to their agreement.

Such Agreements are an attractive proposition for those contemplating marriage who are in a financially stronger position than their partner, and also for those who want to opt for a degree of certainty in the unhappy event the marriage fails.

In February 2014 the Law Commission recommended the introduction of “qualifying nuptial agreements” suggesting that such agreements are treated as enforceable contracts provided they meet specific criteria. 

At the time of writing this article, we are no further forward.  Family lawyers and the public alike are waiting to see if the current parliament will have the appetite to introduce new legislation.  For the time therefore, Pre-Nuptial Agreements are not automatically enforceable in England and Wales and the guidance remains as set out by the Supreme Court in 2010.

This means that when a marriage breaks down and there is a Pre-Nuptial Agreement the court must analyse the circumstances prevailing at the time the Agreement was entered into before determining the extent to which (if any) the parties should be held to the terms of the Agreement. The concept of “fairness” has been raised on a number of occasions and this is guided by principles which include the Agreement not being allowed to prejudice the reasonable requirements of children and not leaving a party in a predicament of real need.

The recent case of WW v HW [2015] explored “need” and “fairness” further.  In this case the parties had entered into a Pre-Nuptial agreement in advance of their marriage in 2002.  In later divorce proceedings the Husband argued that the terms of the Agreement did not meet his needs and so he sought additional provision.  The Wife argued (successfully) that even of the terms of the Agreement were not followed to the letter, the Husband’s claims should be suppressed due to the existence of the Agreement.

Until legislation is introduced I envisage the desire for couples to regulate their financial affairs following a divorce will continue to increase.  If you wish to consider this and would like further information and advice then please get in touch.

 

Sandra Marshall

Published on 10/08/2015

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