Pre-Nuptial Agreements, Why Bother?

What is a pre-nuptial agreement?

A pre-nuptial agreement is an agreement between two parties intending to marry which defines who will own what during the marriage and how their capital, income and pensions will be divided in the event of a separation or divorce.

Are they legally binding?

Historically little weight was applied by the Court to pre-nuptial agreements and therefore they provided limited protection for a party seeking to retain their pre-marital wealth. However, following recent case law, whilst the Court is not absolutely bound to follow an agreement made before marriage, such agreements are now taken into account by the Court and are likely to be upheld.

Would a pre-nuptial agreement be appropriate for me?

Pre-nuptial agreements may be enter into prior to any marriage. They are particularly suitable for parties where there is significant disparity in their pre-acquired wealth, and/or income, and those entering second marriages who want to ensure they provide for the children of their first marriage.

What difference would having a pre-nuptial agreement really make?

In the absence of a pre-nuptial agreement, the Court would divide both parties’ assets in accordance with a list of factors to set out in statute such as the parties’ needs, incomes, earning capacity, assets, length of the marriage, ages and their contributions to the marriage. The majority of cases are governed by needs. In the absence of a binding pre-nuptial agreement, the Court may order a significantly greater financial settlement for one party than that which the parties would have agreed had they discussed matters together.

In addition, having a pre-nuptial agreement may reduce the costs and litigation that often takes place when a marriage breaks down.

How do I make sure a pre-nuptial agreement is legally binding?

A Court would be likely to uphold a pre-nuptial agreement if it is entered into circumstances where:

• The parties fully understood the implications of the agreement
• The parties freely entered into the agreement

In order to establish this, the Court would take account of such factors as whether the parties have received independent legal advice, whether both parties have provided full details of their financial positions (if required) and whether either party felt obliged to sign the agreement in order to ensure the marriage took place.

The Court will also consider whether there are circumstances in which it would not be fair to hold the parties to their agreement such as the birth of a child.

How do I obtain a pre-nuptial agreement?

Firstly you need to discuss with your partner whether a pre-nuptial agreement is appropriate and, if so, try and agree the terms. Those terms then need to be recorded in a written agreement which you both sign, after having taken independent legal advice.

If you need help to agree the terms, that can be done either in mediation or, alternatively, you can both instruct solicitors.

If you would like any information on pre-nuptial agreements, or any other aspect of family law, please get in touch with us.

(This article is part of our Autumn 2010 Newsletter. You can download the entire document (PDF, 11MB) here)