Comments such as ‘They’re not worth the paper they’re written on’ or ‘they’re only for the very wealthy’ are often heard in connection with Pre-Nuptial Agreements. This is not true and provided certain safeguards are observed, Pre-Nuptial Agreements will be upheld in Court.
Pre-Nuptial Agreements are not solely for the very wealthy and will often be entered into where, for example, one spouse-to-be wants to protect a particular asset, such as an inherited business or farm, or wants to leave most of their wealth to their children by a past relationship rather than to their spouse-to-be when they die.
Since the landmark Court ruling in Radmacher v Granatino in 2010, Pre-Nuptial Agreements have generally carried much greater weight in divorce cases provided both parties receive independent legal advice, both provide details of their assets and income, the agreement contains reasonable proposals for financial support for the financially worse-off spouse and children, and preferably the agreement is entered into a little while before the wedding. However, Courts still have discretion and power to uphold the Pre-Nuptial Agreement or make an order for a different financial outcome.
Under proposals from the Law Commission which came out last month, Pre-Nuptial Agreements could become legally binding in England & Wales for the first time.
If implemented, the Commission’s proposals would create a type of contract similar to a Pre-Nuptial Agreement known as a ‘Qualifying Nuptial Agreement’ enabling couples who are engaged or are already married to decide how their property will be split if they divorce.
Providing certain requirements are met the agreement would be binding and for the first time a Court would not be able to interfere. To ensure the Qualifying Nuptial Agreement is binding, both parties’ financial needs must be met by it, both parties’ financial responsibilities to any children must be met, both parties must have disclosed details of their finances and both must have had independent legal advice.
If put into effect, Qualifying Nuptial Agreements could go a long way to make the often stressful, expensive and unpredictable experience of divorce a much more positive experience and finally dispel the myth that Pre-Nuptial Agreements have no effect.
By Beverley Darwent, a Family & Divorce Solicitor at Slater and Gordon.
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