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Prenuptial agreements
Advice

Rise in pre-nuptial agreements following recent Law Commission report

Wendy Campbell Wendy Campbell
2 min read

Further to our last report on the high Courts in England and Wales increasingly taking into account pre and post nuptial agreements, law firms are now seeing a surge of enquiries about pre-nuptial agreements with some firms reporting a 50% increase.

Following the landmark case involving the German heiress Katrin Radmacher in 2010, pre-nuptial agreements have been taken into account in the courts if the Judges are satisfied that the agreement is fair. However financial settlements following pre-nuptial agreements continue to be made by court orders.

The Law Commission as part of a wider overhaul of the divorce system recommended in February 2014 that “qualifying nuptial agreements” be introduced. Similar to the current pre-nuptial agreements, these qualifying agreements would involve couples deciding pre or post marriage how they want to divide their assets in the event of a divorce.

The most significant impact this change would have is that so long as the legal conditions are met, they would be binding and would not be subject to scrutiny over the fairness.

The Law Commission have recommended the following legal conditions:

  1. That the agreement be a valid contract under English and Welsh law;
  2. That it has been validly executed and be made by deed;
  3. That they be completed at least 28 days before the marriage or civil partnership;
  4. That both parties receive full disclosure of the material information about the other parties financial situation at the time of the agreement; and
  5. That both parties enter into the agreement having both been independently legally advised:
    1. That the agreement is a qualifying nuptial agreement that will prevent the court from making financial orders inconsistent with the agreement, save so far as financial needs are concerned.
    2. The effect of the agreement on the rights of the party being advised.

So long as the agreement fulfils these requirements, it is anticipated that they will be binding.

Accordingly, it would be crucially important to discuss varying the agreement at appropriate intervals, i.e. on the birth/adoption of any children to ensure that both parties are protected. The Law Commission have recommended that any variation should also satisfy the above conditions.

Following this report, we foresee a further increase in the amount of enquiries for pre-nuptial agreements.

For a free no obligation consultation, please contact the family team on 0113 320 5000.

 

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