Pre-nuptial agreements (pre-nups) are not the easiest of subjects to bring up with your betrothed. They seem to fly in the face of the commitment you’re about to make. They’re liable, some might think, to make you question your partner’s feelings just as you’re poised to declare your undying love.
Let’s face it, they’re not the most romantic thing in the world. Neither, however, is enduring a bitterly contested scrap later down the line over who owns what and how much each partner is worth. Just ask Paul McCartney, whose divorce in 2008 from Heather Mills saw his financial affairs picked over by all and sundry in the media. The advantage of them is that they can make any future separation more straightforward, and therefore less stressful for both parties. Not surprisingly, given the cost of divorce, pre-nups are becoming more popular.
Strictly speaking, pre-nups are not currently legally enforceable in the UK, but the court may have regard to them in determining what financial orders to make. Indeed, the Supreme Court’s judgment in Radmacher v Granatino  UKSC 42, went further than ever before in recognising their significance.
Similarly, post-nuptial agreements – which are the same as pre-nups, but are drawn up after the wedding or civil partnership ceremony – will often be upheld by the court as long as they are fair and other procedures are followed (see below). So, even once you have the ring on your finger you’re not too late.
If you do decide to go ahead, then the following is a quick guide to this most delicate of subjects.
What is a pre-nup?
A pre-nup is a written contract between two people who are about to get married or enter into a civil partnership. They set out the couple’s intentions regarding division of property and assets during their time together if they separate. They can also cover the couple’s intentions regarding their children. The terms of it must be reasonable and cannot override the laws of the country.
Remember: unlike in many other countries, including the US, a pre-nup is not strictly enforceable in a UK court; should the couple divorce or separate, the courts have the power to override the terms of the pre-nup and decide on the division of assets and property, and custody of children.
What, then, is the point of them?
The answer is that a judge can decide whether or not to uphold the agreement. They are generally considered to be influential on the court, so long as they are entered into in the right way and make reasonable financial provision for both parties.
The pre-nup is also useful because it can shed valuable light on the couple’s financial standing at the point of entry into marriage or civil partnership.
In Radmacher v Granatino, the Supreme Court ruled that:
- The public policy rule that pre-nuptial contracts are void because they anticipate a future separation is obsolete and should be disregarded;
- The jurisdiction of the court cannot be excluded by a nuptial agreement;
- There should be no distinction drawn between the legal treatment of pre-nuptial and post-nuptial agreements;
- A nuptial agreement that is freely entered into by each party who both understand its implications should be given effect to by the court unless it would not be fair to hold the parties to their agreement.
- Whether an agreement is fair should be decided by the court on a case-by-case basis.
Possible terms of a nuptial agreement
When drawing up a nuptial agreement couple’s should consider the following:
- Make sure both parties disclose all their assets.
- Ensure the agreement is in writing and signed in front of a notary public.
- Agree on provisions in the case a divorce. Make sure the division of property is fair – a court will ignore an agreement, for example, which leaves one party rich and the other penniless.
- Think about matters such as pay raises and joint purchases and discuss how these will be distributed on divorce.
- Consider any issues which may arise regarding children, for example, education costs and religious upbringing.
- Instruct separate lawyers.
- Write the agreement well ahead of the actual marriage to avoid accusations that one party was coerced into signing.
Law Commission consultation
The Law Commission is currently consulting on whether nuptial agreements should be made legally enforceable and if so, under what terms. It is due to deliver its final report in 2013.
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