Prenuptial agreements are not enforceable

27/08/2015

It is a sad fact of modern life that around 50% of marriages end in divorce. Therefore it is no surprise that more people are considering prenuptial agreements as a way of regulating what happens if they divorce, especially if this is a second marriage or they have family assets they want to try and protect.

Prenuptial agreements are not enforceable. What financial provision is appropriate on divorce is ultimately down to the Family Court. It has wide discretion. Parties have claims for property, capital, income (commonly known as maintenance) and pensions. The core factors for the court to consider in exercising their discretion are set out in Section 25 of the Matrimonial Causes Act 1973. The needs of any children of the family are always the first consideration of the court and the needs of the parties are key in most cases.

However, a properly drafted prenup can be taken into account by the court and does provide a useful record of what each party brought to a marriage. In recent years the courts have been more willing to look at them during divorce proceedings and how much weight should be given to a prenup will depend on all the circumstances. If the agreement does not comply with some basic procedural requirements and/or does not adequately deal with the parties’ needs, then it is less likely to be taken into account in any meaningful way. The trend from the latest court cases is that the court should give effect to such agreements unless in the circumstances it is not fair to do so. However “fairness” is a key factor in determining whether any divorce settlement is approved by the Family Court.

The Law Commission has recommended that the concept of the needs of the children and the parties is clarified to try and help ensure that decisions on needs can be more consistent in courts across the country. The Commission also recommended the introduction of what it call “Qualifying Nuptial Agreements”. These would be enforceable contracts and not subject to the scrutiny of the court. The Commission set out some basic procedural requirements which are not dissimilar to those we already apply when drafting a prenuptial agreement.

However, and importantly, Qualifying Nuptial Agreements cannot contract out of needs. So that part of the court’s discretion would remain. The Commission has published with its findings a draft bill. Whether that will be enshrined in law remains to be seen.

Prenuptial agreements, whether under the current system or under the proposed Qualifying Nuptial Agreements, are not going to be for everyone. Our advice is to consider whether to make one several months prior to the wedding. A good prenuptial agreement is comprehensive and takes time to draft and negotiate. We all have to think carefully about legal fees. If you intend to spend money making a prenuptial agreement it needs to be drafted properly.

Should you wish to discuss a prenuptial agreement, do not hesitate to contact our Family Team.

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