Pre and Post Nuptial Agreements

A Sensible Option?

“To you I give all my worldly goods, through sickness and health, for richer for poorer… apart from all the most important assets which are tied up in our pre-nuptial agreement” - is this to be the new marriage vow?

In November 1998 the Government’s Green Paper ‘Supporting Families’ considered that there may be advantages in allowing couples to make written agreements as to the division of their assets upon divorce which would be legally binding. The debate on pre-nuptial agreements has been long and fierce but this was the first indication that English Law may adopt this arrangement in line with America and many of our European neighbours. The well known case of Radmacher vs Radmacher in late 2010 changed the situation and now pre-nuptial agreements have significant weight under English law.

Pre-nuptial agreements are viewed by many with suspicion and are dismissed as unromantic planning for failure at a time when they should be thinking of unconditional love and a lifetime together. But increasingly couples are opting to include a pre-nuptial agreement as part of their preparation for marriage. In an age when the divorce statistics aswell with each census, people are choosing this route in an attempt to ensure they will not join these numbers or, if they do, to preclude lengthy and distressing litigation.

A pre-nuptial agreement may give people more choice and responsibility for ordering their own lives. Some couples welcome the opportunity to be able to discuss and decide financial issues before marriage and feel that they could embark on a life together with a more solid foundation. It was pointed out that pre-nuptial agreements may actually encourage some people to marry who would not otherwise.

There are some key considerations with a pre-nuptial agreement:

• Children (born before or after the agreement) may alter the financial responsibilities;
• The general law of contract is applicable (duress, mistake etc.);
• Each party should receive independent legal advice;
• Full financial disclosure by both parties is essential;
• The agreement should not be made less than 28 days prior to the marriage.

The strength of any pre-nuptial agreement must lie in its flexibility to cater for any future eventuality as they are drafted in order to prevent or minimise litigation not to provide more cause for conflict. Another positive aspect for drafting a pre-nuptial agreement, even under the present law, is that it is a good forum for the engaged couple to discuss any financial matters which are worrying them. It is always important for the couple to be honest and open and not to feel embarrassed or unable to ask questions about each others finances. In this way, a pre-nuptial agreement allows each party to feel empowered as to their future joint assets and to be given an assurance (albeit not legally enforceable but as good as the law can provide) that they will be financially provided for in the event of marital breakdown.

A pre-nuptial agreement can be a therapeutic part of preparation for a solid marriage. As a statement of the parties’ intentions at the time of the marriage this can at least provide peace of mind to many couples as long as they have good advice as to how to comply with the guidelines in order to maximise the chance of it being held valid at a later date.

The negotiations leading up to an agreement can play a vital role in a couple feeling ready for marriage with all their ‘cards on the table’. Preparation of a pre-nuptial agreement can be difficult, awkward and challenging at times but it gives couples the opportunity to ask all their ‘What If..’ questions covering a range of hypothetical possibilities such as – apart from separation and divorce – the birth of children, serious illness, premature death, redundancy or other financial disasters, career moves, inheritance, pensions and even lottery wins!

Although the future of pre-nuptial agreements is still uncertain, with more couples including them in their marriage and asking the Courts to rely on them, it is hoped that they will be recognised and take their place as a positive mechanism for encouraging marriage and easing the strain of its breakdown.

If you would like further information about Prenuptial Agreements or would like to arrange a meeting, please contact Patrick Hart or Simon McKirgan by email or by telephone on 020 7583 2222.