For richer, for poorer?

All newlyweds look forward to a long and happy life together. Probably the last thing on their minds is how they would split the matrimonial assets should the relationship fail.

Nobody likes to think that a marriage might end but we all know that this happens sometimes. A protracted dispute over who should get what can only add to the emotional turmoil created when a couple decide to part.

One way to avoid the trauma of matrimonial litigation is to draw up a financial agreement before tying the knot, setting out how the family wealth should be divided. Such pre-nuptial agreements are particularly advisable if, for example, one partner is substantially richer than the other or if a couple do not plan to have children. They are also advisable if one or both partners have had children and there is a wish to protect the family wealth for them.

“The problem is that pre-nuptial agreements are not in themselves binding on our courts unlike in much of Europe and other parts of the world,” said John Brownrigg, head of the family law and mediation team at Stone King. “This means the courts have an over-riding discretion over the division of all matrimonial assets and that the agreement is only one of the factors to be taken into consideration.

“Such agreements can also be seen to undermine the concept of marriage as a life-long union and are not very popular for that reason. Discussing what should happen if you separate is not the most romantic way to begin married life together!

“However, recent cases have shown that the courts are willing to take a firmer stance with regard to pre-nuptial agreements. Most notably, a wealthy heiress secured victory in the Supreme Court in October 2010 when the Court enforced a pre-nuptial agreement with her former husband. Guidance was provided that courts should give effect to a pre-nuptial agreement where it was freely entered into with a full appreciation of its implications unless it would not be fair to hold the parties to it.

“Therefore, while wholesale reform of the law on marriage agreements is a matter for Parliament rather than judges,” added John “these recent rulings show that judges are now willing to take them into account to a much greater extent than before.

“So if you want to take control of your own financial arrangements you should consider entering into a pre-nuptial agreement. This gives a clear indication of what you want should something happen to your relationship.

“But remember, the courts have an over-riding discretion over the division of all matrimonial assets. The guiding principle is one of fairness. Each party should seek separate legal advice and there should be full and frank financial disclosure on both sides.”

If you plan to marry, Stone King can draft a pre-nuptial agreement. We can also draft a cohabitation agreement for those living together, or a pre-partnership agreement for civil partnerships.

John concluded: “Marriage breakdown is always traumatic for those involved. It is appropriate for some couples to make a plan as to what they consider amounts to a fair division of assets should things go wrong and reduce the emotional fallout and anxiety.”

The law and practice referred to in this article or webinar has been paraphrased or summarised. It might not be up-to-date with changes in the law and we do not guarantee the accuracy of any information provided at the time of reading. It should not be construed or relied upon as legal advice in relation to a specific set of circumstances.

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