When will a prenuptial agreement, drawn up by my partner, be upheld by a court in our divorce, and when won’t it?
By Vanessa Lloyd Platt, Lloyd Platt & Co
There is much confusion in this country as to the validity of pre-nuptial agreements, how they work and what should be in them. Also, what will invalidate prenup agreements?
Under UK law, prenuptial and postnuptial agreements are legal contractual agreements that set out between spouses and partners how assets will be divided in the event of a divorce or civil partnership dissolution.
What is a Prenup?
It is a contract that is entered into before the marriage (this is to be compared with a postnuptial agreement which is drafted after the marriage, more about this later). The prenup will set out the agreement reached between the parties regarding property, income, pets, other assets acquired by them individually such as an inheritance or together such as joint purchases.
The intention behind most prenuptial agreements is to provide clarity and certainty around what should occur in the event of a breakdown of a marriage or relationship. It will bring certainty, structure, and lack of stress in arguing about the finances at a later date, as the parties will know what is intended to be the outcome. The most commonly used prenup is to protect specific assets so that they can be, as lawyers refer to it, as “ring fenced” and taken out of the matrimonial pot. This will prevent them from being shared wealth.
The pros and cons
The issue of prenuptial agreements is whether they can be considered to be legally binding and enforceable in the UK. A prenuptial agreement in the UK is not automatically legally binding but will be considered so by a court so long as it meets certain criteria which have been set out by the Supreme Court and further reviewed by the Law Commission following a case known as Radmacher v Granatino [2010]. These are:
- The agreement must be freely entered into. This means that no coercion or pressure should be brought to bear on one party to the other.
- Both parties must understand the implications of the agreement reached. This means that both parties must understand what they are entering into, and the weaker party be given full information.
- The agreement must be fair. With all prenups ‘fair’ is the buzzword.
- The agreement must be contractually valid. Many prenups in the United States have clauses which would not be enforceable in the UK as they are regarded as against public policy. These surround penalties being given for infidelity, bad conduct, and in some cases penalties for putting on weight which the other party would find to be unattractive. Those kinds of clauses will not be allowed in the UK generally. It is therefore vital that your prenuptial agreement lawyer, if such clauses are inserted, confirms that the particular clause can be severed off from the rest of agreement to make the rest valid.
- Preferably prenups should be signed at least twenty-eight days before the wedding.
- There must be disclosure about the wider financial circumstances. This means that a schedule should be attached to a prenup setting out both parties’ financial information, but it should be noted that several cases have indicated that this does not have to be totally accurate.
- Both parties should have received legal advice.
- It should not prejudice any children of the subsequent relationship.
- Both parties’ needs must be met.
It must be understood that following the Radmacher & Granatino case, Pre-Nuptial agreements have been afforded much more weight by the Court than previously, but there is only one factor that can be considered when dealing with divorce finances.
However, do not think that the prenuptial agreement that you have signed up to will not be considered by the Court. There have recently been cases where the Court has considered the pre-nuptial agreement to be a magnetic factor which cannot be ignored and will have had a direct impact on the Court’s decision.
Furthermore, some prenuptial agreements have been upheld even where both parties have not received legal advice, or the agreement was signed very close to the wedding, although each case will turn on its own facts and one should not be complacent that the Court will ignore it.
Recent cases have made it clear that when two adults enter into a contractual agreement, they should be held to it. It should also be noted that if one party disputes the validity of the prenuptial agreement, there will have to be a preliminary argument before the Court over the impact and effect of the prenuptial agreement.
When to have a prenuptial agreement in the UK
Prenups are particularly used when one half of the couple has or is likely to have significantly more assets than the other. This may be in cases where one has a large inheritance or intended to have a large inheritance or in e.g. farming cases, or generally large landowners where the land has come through the generations, business owners or those marrying after a previous relationship or marriage where they have acquired assets that they wish to protect either for their children from a previous marriage or generally.
A prenuptial agreement, by its very nature and description, must be signed before the marriage takes place. If the parties have already married but either want to vary the terms of the prenup or obtain extra protection, they can draw up a postnuptial agreement. This can be treated in the same way as a prenuptial agreement but is made after the marriage and usually to avoid a divorce taking place and at any time during the marriage.
In order to be binding, prenuptial agreements should have the input of independent legal advice. In the absence of this, one party could claim that they were coerced into signing or did not understand it and it would ultimately not be held to be binding. It is therefore vital that both the parties and their legal advisors sign at the back of the prenuptial document to give it weight.
Prenuptial agreement cost
Prenuptial agreements can vary in price from about £3,000 plus VAT to a much greater sum pending on the complexity of the contents and the number of negotiations to reach agreement. The same prenuptial agreement solicitors cannot advise both parties on a prenup or postnuptial agreement; it must be independent advice given to each.
By their very nature, prenuptial agreements are drafted as what is known as bespoke documents to set down the circumstances of the matter and the intention of the parties.
In any cases involving different jurisdictions issues, if the circumstances are that the parties have lived or intend to live in other countries, we would advise to draw up a prenup in both jurisdictions and have this mirrored as a postnup in the other jurisdiction after the marriage. This will give extra weight to the intentions behind the document and more likely ensure that the court will uphold it. It should be quite clear in the prenups and postnups which jurisdiction is to take priority.
Contact Lloyd Platt Family Law Solicitors today
Lloyd Platt & Co are experts in dealing with prenuptial and postnuptial agreements, working through the minefield of law in this area, ensuring that the intentions of the parties are upheld by the courts.
Read more about this topic in our articles Guide to Prenuptial Agreements and Suggested prenup for Prince William and Kate Middleton for more information on the process.
If you want to discuss any aspect of divorce and separation, including prenuptial agreements in the UK, please fill in our form below, call us on 0208 343 2998 or click to contact our divorce lawyers in London.
