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Pre-nuptial agreements – an effective and practical way of avoiding heartache?

29 Jun 2010

Nicola Matthews, Partner in the Family Law department, provides the answer.

Although unromantic, entering into a pre-nuptial agreement before marriage may save you money, uncertainty and heartache if your marriage breaks down.

Currently, the courts in England are not obliged to enforce pre-nuptial agreements but if certain formalities are followed when the agreement is prepared, and it is fair, there is a good chance that the court will hold the divorcing parties to it.

Pre-nuptial agreements are particularly relevant for couples where one party is bringing more wealth into the marriage than the other and wishes to avoid having to share it equally with the other party if the marriage breaks down. This may be particularly suitable for middle aged or elderly people, or people entering into second marriages.

A properly prepared pre-nuptial agreement will be taken into account by the court along with other factors.  The weight to be given to the agreement will depend upon the individual facts of the marriage.  For example, in a recent landmark case the court held that the existence of a pre-nuptial agreement in a short, childless marriage between two independently wealthy people was a factor of “magnetic importance”, not simply one of the peripheral factors in the case. 

The court would normally expect the following to be observed before taking a pre-nuptial agreement into account: –

  • The agreement should be made at least 21 days prior to the marriage, to avoid an agreement being forced on someone shortly before their wedding day, when they may not feel able to resist.
  • Both parties should have received independent legal advice about the terms of the agreement, prior to its signing. If one party has not, the court will have doubts whether that party fully understood the agreement before it was signed, and therefore is unlikely to hold them to it.
  • Both parties must also give disclosure of their financial circumstances to the other before the agreement is signed. Otherwise, a party may enter into the agreement without full appreciation of what assets the other party has, and therefore without knowing what would be fair terms to which to agree.

If the court is satisfied that these formalities have been correctly observed, it will examine the contents of the agreement and decide whether it is fair to both parties. In some cases the court may think part of the agreement is fair, and uphold it, but vary a different part of the agreement. For example, the court may think that the division of the cash assets is may be fair but that the level of maintenance is too low.

The court is also less likely to uphold the agreement if circumstances have changed since the agreement was drawn up, for example, if children have been born. It is wise to review and amend agreements in the event of a change in circumstances.

Courts are also prepared to take post-nuptial agreements into account, so it is not too late for those parties who regret the fact that they did not enter into an agreement before the marriage ceremony.

The collaborative law process is an ideal way of agreeing the terms of a pre or post-nuptial agreement. The terms will be discussed and agreed in face to face meetings with the two parties and their individual lawyers, rather than the parties meeting with their solicitors to discuss the terms and the solicitors writing letters backwards and forwards to each otherseparately.

If you are getting married, you need to consider updating your will. A will is automatically cancelled by marriage, so if you do not update it before your marriage, any provision for existing family members will fail. On death, your assets would be dispersed in accordance with intestacy rules made by Parliament, rather than how you would wish.

Nicola Matthews is a Law Society Family Law Panel Member, qualified Collaborative Lawyer and local chair of “Resolution”, an association of specialist family lawyers who adopt a firm yet conciliatory approach to family cases. For further information contact Nicola on 0191 232 8345 or email nicola.matthews@hay-kilner.co.uk

Please note:
This article is not legal advice; it is intended to provide information of general interest about current legal issues. Please contact us to discuss how the contents of the article may affect you.