Prenuptial agreements do not bind the courts in England & Wales. This is because the courts have a wide discretion in deciding what the financial outcome of a couple’s divorce might be. So what is the point of a pre-nup?
The case of Radmacher V Granatino in the Supreme Court stated that it was likely that a prenuptial agreement would be upheld if it were fair. It 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”. One must now assume that a prenup may well be followed by the court if it is satisfied of the document’s fairness.
The Law Commission examined pre-nups in its work, Matrimonial Property Needs & Agreements. Tony Roe sat on its advisory group on this topic. The Commission recommended the introduction of “qualifying nuptial agreements” or “q-nups”. This part of the Law Commission’s work has not been followed. However it provides a useful guide about what to take into account when drafting a pre-nup. This can include a cooling off period between the signing of the document and the marriage. There is also the question of a need for independent legal advice for each party.
So when should one consider having a prenup? Second families of divorced parties? One instance can be where one party or both already has children and wishes to cater financially for their needs. Another might be to protect a family’s assets where a child is marrying someone who has much lesser wealth than they have and the family wishes to protect what that child might inherit.
How flexible is a pre-nup? A pre-nup can be very flexible in its terms. It may provide that certain property be excluded from division. It may set out which party should retain a certain liability. It can include a review clause should a certain event occur, for example the birth of a child to the parties or after a period of time.
Aren’t pre-nups unromantic? There is a view that pre-nups are not the most romantic of documents. However they can offer some comfort to one or both parties going into a marriage with their eyes open, knowing that they have sought to provide for circumstances should their marriage breakdown.
Can a pre-nup be a good investment? Whilst a pre-nup cannot offer certainty of outcome its cost can be a drop in the ocean when compared with the costs of contested litigation over matrimonial finances.
What governs the cost of a pre-nup? The cost depends on whether one is drafting a prenup or advising on one drafted by the other party’s lawyer. It also depends on the level of agreement that there already might be. Tony Roe specialises in bespoke pre-nuptial agreements and would give the best costs estimate possible at the outset of the matter.