Pre-nuptial agreements (AKA "pre-nups") have traditionally been associated with wealthy Hollywood glitterati seeking to secure their assets in case of divorce. However, in recent years, such agreements have become more popular with couples in the UK from all walks of life, who ask solicitors to help draw up a pre-nup. But how effective are they?
Contrary to popular perception, pre-nuptial (and post-nuptial) agreements are not legally binding in England and Wales. Although the Supreme Court decision (in the landmark case of Radmacher v Granatino) strengthened the force of pre-nups and ruled that they should be upheld by the courts as long as they are fair, judges can still order different financial provision in the event of a divorce.
Agreements could be bolstered by potential legislation
Earlier this year, the Law Commission published a report (Matrimonial Property, Needs and Agreement) that proposed the introduction of "qualifying nuptial agreements". Whether pre- or post-nuptial, such agreements would qualify for enforcement by the courts. The report came along with a draft "Nuptial Agreements Bill", which presented the proposals in legislative format.
At around the same time that these Law Commission recommendations were published, a Private Members' Bill (The Divorce [Financial Provisions] Bill) was introduced to the House of Lords. If this bill is approved, it will have the same effect as the "Nuptial Agreements Bill" by enshrining nuptial agreements in law so that courts are obliged to uphold them. And it would limit the length of maintenance payments to three years and share the net value of matrimonial property equally between the parties. At time of writing, the bill has passed the second reading in the House of Lords.
The future of nuptial agreements
Whether either of these bills will succeed in making law, the enforceability of pre-nups and post-nups looks likely to become less dependent on the discretion of individual judges.
A member of the Law Commission, Professor Elizabeth Cooke, summarised the reasons that making nuptial agreements enforceable under legislation would be preferable to the current situation. She said: "Pre- and post-nuptial agreements are becoming more commonplace, but the courts will not always follow them and lawyers are therefore not able to give clear advice about their effect. Qualifying nuptial agreements would give couples autonomy and control, and make the financial outcome of separation more predictable."
Copyright © 2014 Muna Saleem, associate solicitor with family law firm Crisp & Co and accredited member of the Law Society’s Family Law Panel.