Prenuptial Agreement Information
A premarital agreement sets out how assets will be divided if a couple separates permanently or if marriage ends.
Pre-nups are not strictly enforceable or legally binding in the UK. However, a properly prepared pre-nup should give a large measure of protection to the economically stronger spouse.
The main point of principle was established by the decision of the Supreme Court in Radmacher –v- Granatino in 2010 “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 the agreement”.
There is now effectively a presumption that a pre-nup (and any other marital agreement) freely entered into by the couple with a full understanding of its implications, will be upheld by the court, unless it would be unfair to do so.
Recently, the Law Commission, a body who advises on law reform, has recommended that prenuptial agreements should be legally binding in divorce settlements, but only after certain criteria have been met.
In a report on the reform of matrimonial property laws, the commission calls for the introduction of standard formulas to help resolve disputes over financial settlements and publication of official guidance on what constitutes legitimate “financial needs”.
They have recommended that these agreements become legally binding subject to stringent qualifications. One requirement is that at the time of signing both parties must disclose material information about their financial situation and have received legal advice.
A further restriction, under the commission’s proposals, is that agreements would only be enforceable “after both partner’s financial needs, and any financial responsibilities towards children, have been met”.
Introducing prenuptial agreements without protection of the parties’ needs “would be very damaging”, the commission warns.
Prenuptial agreements are likely to remain of greater relevance to the wealthy where financial assets significantly exceed lifetime maintenance needs, which include requirements for housing, childcare, education and income.
The Law Commission’s proposals will be sent to the Ministry of Justice, which will examine whether it wishes to draw up legislation on the basis of the suggestions.
If you would like further advice on this or any other aspect of family law please contact Paul Prentice at email@example.com