Binding ‘pre-nup’ Law proposed by Law Commission

News Posted: March 18, 2014

Words from Sarah Millington, Associate and Head of our Family team.

As many divorcing couples will have discovered, Courts presently have a huge discretion as to how to divide the financial assets, that exist at the time of the divorce / separation.

After a four and a half year consultation, the Law Commission is recommending that Pre-Nuptial Agreements should be given full legal force, a move that would bring the law of England and Wales into line with many countries in Europe and many US states.

The Courts adopted a cautious approach towards such agreements, until the high profile decision of Radmacher and Grantino in 2011, when the Supreme Court said “The Court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless it the circumstances prevailing it would not be fair to hold the parties to their agreement”.

Building on this, the proposed amendment to the law recognises what many see as a very real place for  pre nuptial agreements in the 21st century. As the amount of marriages ending in divorce continue to increase, so to do the amount of second or third marriages.

It is those particularly considering a second or third marriage, who will be reassured that pre nuptial agreements may well transpire to be a secure way to protect children from previously marriages and their prospective inheritances, or for those who have inherited property.

The agreements will need to be carefully drawn up in order to qualify and be enforceable. Importantly, the agreements will need to be made after both parties have exchanged financial disclosure and it would not be possible to waive the right to take independent legal advice.

Whilst it seems likely that steps will be taken to clarify the enforceability of pre nuptial agreements and to give clear guidance as to how the Courts should approach resolution of financial disputes, so as to create more consistency in the final orders made, enabling early legal advice to be more specific and potentially more matters to be resolved at an early stage.



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