Pre-Nuptial Agreements

As the law stands, where a couple enters into an agreement setting out what should happen to their finances in the event of separation, it is only at the Court’s discretion as to whether this agreement is then taken into account. However, the Supreme Court decision of Radmacher v Granatino in 2011 signalled a shift in the attitudes of the Courts and a far greater willingness to place weight on such agreements. Furthermore, a Law Commission Report in 2014 recommended the introduction of legally binding nuptial agreements where certain criteria are met. Although such recommendations have yet to be implemented by Parliament, couples are increasingly recognising the benefits of setting out what would happen in the event of a breakdown in their marriage.

When is it appropriate for a Pre-Nuptial Agreement to be entered into?

The aim of a Pre-Nuptial Agreement is to set out clearly how the couple’s finances should be separated in the event of divorce. This would hopefully ensure that litigation is minimised as each party would be bound by that agreement and the cause for dispute would therefore be limited. Where there is a disparity in the wealth positions of the parties when entering into marriage, or where inherited wealth has been received or is expected, such agreements are of particular relevance. They can also be particularly relevant to older couples who marry where the partners already have children who they wish to inherit part of their estate.

What factors would increase the likelihood of a Pre-Nuptial Agreement being binding in the event of divorce?
  • There must be no undue influence, duress, fraud or misrepresentation. 
  • The agreement is signed 28 days before the wedding day;
  • The couple must have obtained independent legal advice at the time they entered into the agreement;
  • The couple should disclose to one another full details regarding their financial circumstances;
  • Both parties’ needs must be met, ie by implementing the terms of the agreement, both parties must be able to meet their reasonable needs viewed within the context of the marriage.

In brief, the costs and stress of resolving disputes on divorce can be significant and an agreement which clearly demonstrates the intentions of the couple when entering into a marriage can greatly assist at what is already an emotional and difficult time.

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