Pre-Nuptial Agreements

A pre-marital agreement, also called a pre-nuptial agreement is essentially a contract between the parties before they get married which seeks to regulate how their assets and income should be divided in the event of their separation/divorce.    Despite their contractual status, a pre-marital agreement cannot oust the jurisdiction of the Courts in deciding financial Orders.  In other jurisdictions such as Sweden, Canada, New Zealand and certain US States these agreements are fully enforceable.

Marriage contracts are a feature of certain religions, for example Islam.  Pre marital agreements are not binding in England and Wales.  However, they have been regarded by the courts, more recently as, persuasive.  The existence of a properly drafted pre nuptial agreement may affect the outcome of a case because the court will have regard to it when considering ‘all the circumstances of the case’ or ‘as conduct it would be inequitable of the court to disregard’.  However, most of the case law surrounding recognition of pre marital agreements relates to ‘big money cases’.

The Law Commission’s report published in 2014, recommended that statutory recognition of pre-marital agreements and that there should be legislation to introduce ‘qualifying nuptial agreements’.  In order to become a qualifying nuptial agreement, specific formation requirements were essential such as: each party should obtain independent legal advice, any agreement made as a result of undue influence would be voidable, the agreement should be made at least 28 days before the wedding and must be made by deed and include certain declarations from each party acknowledging the status and enforceability of the agreement.  Even so, qualifying agreements could not contract out of meeting the financial needs of a party or the needs of any children.

Advantages       Disadvantages
  • The parties can decide their own outcome on divorce, which will reduce costs and acrimony in the event of a divorce.
  • As many marriages end because of this agreement over finances, pre-marital agreements can encourage openness of finances.
  • In times when two in five marriages fail, pre-marital agreements may encourage marriage certainty over Court proceedings.
  • Pre-marital agreements may save time and costs in Court proceedings.
  • Pre-marital agreements can protect wealth or family assets of preserved property for children for earlier marriages.
  • As the position of the parties can change over time, for example the birth of new children or one party becoming sick or disabled, the pre-marital agreement will become out of date and likely unenforceable.
  • One of the parties might unduly influence the other into an unfair pre-marital agreement.
  • Paul McCartney said they are “unromantic”.
  • A pre-marital agreement may discourage marriage for fear of losing assets.
  • There is a financial cost for independent legal advice for both parties prior to the marriage.

In recent Court cases, pre-marital agreements have been held to be enforceable by the Courts and Supreme Court in the case of Radmacher v Granatino [2009] held that “the Court should give effect to a nuptial agreement that is 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”.  The situation now is that unless there are exceptional or new circumstances, the Courts appear to see no reason to deviate from the agreement.