Pre-nuptial Agreements

Preceding marriage, a couple can enter into a pre-nuptial agreement which is a formal agreement that makes provisions for the division of a married couple’s assets in the event of a divorce or separation. In any event, the courts will always consider all the circumstances of a case, with the division of matrimonial assets upon divorce guided by s25 of the Matrimonial Causes Act 1973. However, a pre-nuptial agreement can minimise the stress and financial risk involved in the event a married couple go their separate ways. A pre-nuptial agreement provides for division of the matrimonial home, inheritance, other martial assets and liability for debt following separation.

 

In England, Wales and Northern Ireland, pre-nuptial agreements are not legally binding and do not guarantee the terms of the agreement will be adhered to during divorce proceedings. However, in recent years there has been significant developments in the courts approach to this area of law whereby, the legal weight of pre-nuptial agreements has significantly strengthened. The position of pre-nuptial agreements in separation or divorce proceedings has moved in a greater direction of acceptance, providing certain safeguards are met.

 

This change of approach followed the landmark Supreme Court decision in Radmacher v Granatino [2010] UKSC 42. This case established a greater acceptance of pre-nuptial agreements, giving far greater weight when considering financial proceedings upon divorce. Following this case, the courts may be prepared to give effect to a pre-nuptial agreement provided it has been entered into freely by both parties, without duress or due influence and both parties have full appreciation of its implications, unless it would be unfair in the circumstances to hold the parties to it. To ensure the parties have full knowledge of the implications, it is imperative both parties have sought sound, independent legal advice in advance. Other actions that support the validity of the agreement include:

 

  • Ensuring the parties had adequate time to reflect on the implications of the agreement before marriage.
  • Full financial disclosure of both parties to prove that each party had access to all material information that may affect his or her decision to enter into a pre-nuptial agreement.
  • Ensuring the agreement does not prejudice the reasonable requirements of any children within the family.

 

Consideration must be given to the parties current and future needs when assessing the enforceability of the pre-nuptial agreement. The courts are reluctant to give significant weight to a pre-nuptial agreement during financial proceedings if circumstances have considerably changed in a way that was not envisaged when the agreement was entered in to.

 

As circumstances can vary significantly from family to family, it can be difficult to ascertain clear and consistent principals relating to pre-nuptial agreements. It will be subject to the discretion of the judge to decide whether or not the pre-nuptial agreement will be enforceable. However, as the position of a pre-nuptial agreement in society is developing with greater emphasis on their enforceability, it can certainly be beneficial for a couple to enter in such agreements which can provide peace of mind for both parties.

 

A family law solicitor can help arrange and draw up a pre-nuptial agreement and the costs of this will depend on the complexity of the issues and the extent of the assets in question.

 

Post-nuptial Agreements

After separation, a couple can enter into a post-nuptial agreement outlining how finances and assets will be held and distributed in the event of the couple divorcing or separating. Post-nuptial agreements may be considered as a binding contracts between the parties and are drawn up after marriage. Post-nuptial agreements are similar to pre-nuptial agreements except for the fact that they are entered into after marriage.

 

A post-nuptial agreement is a contract between the parties and therefore safeguards must be considered for the agreement to be enforceable. Similar to pre-nuptial agreements, both parties should seek independent legal advice in advance. Both parties must also give a full financial disclosure before the agreement is entered into. Similar to pre-nuptial agreements, there is no guarantee that post-nuptial agreements will be upheld in every case. One party can apply to the courts for a further financial provision at a later date, for example through divorce proceedings. However, this is not to say that the post-nuptial agreement will be entirely displaced if the agreement is fair for both parties.

 

Scotland

The general rule in Scotland is that prior to marriage, a couple can enter into a contract determining their future financial provisions. The courts in Scotland typically respect an individual’s right to enter into a contract in this way, particularly if both parties had sought legal advice in advance of signing the agreement, and the agreement is fair and reasonable. The Scottish courts have discretion to set aside any pre or post-nuptial agreement or term where they deem it not fair or reasonable at the time it was entered into.

 

Northern Ireland

If a pre-nuptial or post nuptial agreement is disputed in the context of divorce proceedings, the terms of the agreement will be subject to Article 26(1) of the Matrimonial Causes Order (Northern Ireland) 1978. The court can use their discretion to vary the agreement for the benefit of the parties to the marriage and of the children of the family.

 

Ireland

There is nothing in Irish law which prohibits a couple entering into a pre or post-nuptial agreement. Both are not entirely enforceable at present in Ireland but can serve as guides for the courts in the event of separation or divorce. The courts must give consideration to pre-nuptial agreements but are not obliged to follow them if they are unfair.

 

 

For any further advice regarding pre or post-nuptial agreements, contact Health Assured’s confidential EAP helpline on:

0800 030 5182

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