A Pre-Nuptial Agreement is sometimes called a Pre-Marital Agreement or more commonly a “Pre-Nup”.
Whatever you wish to call it, it is basically an agreement that is entered into before marriage which attempts to deal with a couple’s assets in the event that the marriage breaks down by separation or divorce.
It's not exactly in the spirit of romance but according to latest figures, 46 per cent of Brits would like to see prenuptial agreements made legally enforceable in the UK.
Although frequently associated with the rich and famous, they are now gaining increasing popularity with couples about to “tie the knot”. Recently influential in this is the publicity surrounding notable divorce settlements, such as the 2006 House Of Lords decision in Miller v Miller when Mrs Miller recovered £5m following a childless marriage lasting only 2 years and 9 months. This and other big money cases have emphasised the benefits of a prenup, especially where there is a disparity in wealth between the partners. Furthermore, a lot more couples are simply being “realistic”, being conscious of the fact that more and more marriages are ending in early divorces and the need to plan for the possibility that their marriage will also not last.
Although a prenup is not legally binding on a Court, if the proper procedures are followed carefully the terms of the Agreement will, in appropriate cases, be taken into consideration by the Courts. If they are made legally binding meetings with a solicitor prior to marriage could become as commonplace as those with a vicar!
Prenuptial agreements can not only save heartache and bitter rows in court over who has what among a couple, but on a larger scale, it is in the interests of the Government as it keeps more litigation out of court…
In the landmark case of K v K in 2003 in the High Court, the Judge, Roger Heywood Smith, held Mrs K substantially to its terms, thereby saving Mr K millions of pounds. This case also set out some of the criteria that the Courts will look at when considering prenups.
These were as follows:-
- Did the party with most to lose understand it
- Did he/she have independent legal advice
- Was he/she under pressure to sign
- Did the parties each make full disclosure of their financial circumstances
- Would an injustice be done if the agreement is upheld.
Clearly if the answer to any of the above is “no”, the prospects of the agreement being taken into consideration, would be markedly reduced. It is consequently crucial that these issues are addressed to give any such agreement the greatest possible chance of being accepted by the Courts.
The needs of any children resulting from the marriage will take precedence over the terms of the prenup. Prenups are, however, flexible and can be written to take into account any changes in circumstances including the birth of a child, the duration of the marriage and possible inheritances etc.
Although clearly unromantic, a prenup will in many cases, prove prudent financial planning. Bearing in mind the current divorce rate, it is inevitable that these agreements will gain in increased popularity.
Both parties will need to consult their own solicitors. However, it is vital for the document to be drawn up by a solicitor specialising in this field, as failure to ensure that the correct procedure is followed could result in the agreement carrying no weight at all if challenged by the less wealthy partner.
When people get married, they want to believe it will last forever, but realistically we know that it doesn't always work out that way so prenups could help avoid future heartache and distress and help couples resolve more matters themselves, then it has to be a good thing….
