Lauren Preedy – Head of our Divorce Team

Pre-nuptial agreements

Our team are experts in the preparation of prenuptial agreements.

What is a pre-nuptial agreement?

A prenuptial agreement is an agreement between a couple who are planning to enter a marriage or civil partnership. (A nuptial means wedding. A prenuptial agreement is an agreement entered into before the wedding. A postnuptial agreement is an agreement entered into after the wedding).

The agreement says what the couple intend to happen to their money and property if the marriage or civil partnership were to end.

The legal rules about how these agreements should be treated come from the usual laws that apply to divorce, and also a from decision of the Supreme Court in 2010. (This case was widely reported in the news at the time and was called Radmacher v Granatino).

In this case the Supreme Court said:

‘The court should uphold a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement’.

These agreements can therefore be very significant. Below are some questions and answers about prenuptial agreement.

We are experts in prenuptial agreements. It is a mistake to view a prenuptial agreement simply as a contract. Entering into a prenuptial agreement is better viewed as a process. As is explained more fully below, the process of ensuring that both of the couple understand the implications of the prenuptial agreement normally requires a level of financial disclosure and the taking of legal advice.

Both of the couple are more likely to be held to the terms of a prenuptial agreement if they can be seen that there has been a genuine negotiation about its terms (rather than one imposing the agreement on the other as a precondition of getting married or entering into a civil partnership).

Because prenuptial agreements are entered into shortly before marriage, the court will be concerned that there may be evidence that one of the couple has pressurised the other into signing. Therefore it is normally best for these agreements to be finalised several months before the wedding (to avoid any disagreements getting in the way of the wedding itself). If the couple have left it too close to the wedding to reason be able to complete a prenuptial agreement – it is still possible to achieve the same effect by entering into a postnuptial agreement (exactly the same but entered into after the wedding).

Because these agreements are between a couple who are committed to each other and who are getting on – rather than the terms being thrashed out in long and expensive letters between solicitors – there is considerable merit to the couple discussing agreeing and finalising the terms through the process of collaborative law. There is much more about collaborative family law on our collaborative family law pages. (We are lucky to have a very strong collaborative family law team).

Everyone’s situation is different and these types of agreement can be more complicated than they might seem when a couple is thinking about the possibility of a prenuptial agreement and before taking advice. Perhaps it’s a good idea to think of a prenuptial agreement as a potential lifeboat in the event that the marriage fails. You are not going to know if the lifeboat floats until you actually launch it into the water. It is therefore sensible to devote a reasonable amount of time and expense building of the lifeboat as well as possible – rather than skipping parts of the construction.

If you are thinking that a prenuptial agreement may be helpful to your situation then please give our team a call. We are ready to help.

FAQs about Pre-nuptial Agreements

Entering into a prenuptial agreement does not mean that you are going to get divorced. The process of preparing a prenuptial agreement if carried out in the right way could actually be helpful to a couple in allowing them to talk through their financial arrangements and their future financial plans and expectations of each other. Not everyone is very good at talking about financial arrangements or plans to have a family. Not talking about things properly can lead to friction later on.

As a prenuptial agreement starts with a discussion between the couple and their preparation is particularly suited to the process of collaborative law which is very much a talking process (with on hand legal advice).

Everyone has their own reasons for wanting to consider entering into a prenuptial agreement, but some of the following may be relevant:

  • one of the couple has substantially greater capital or income than the other.
  • one or both of the couple would like to protect the assets which they owned before to the marriage. This could include their interests in family trusts or money which they have inherited or are due to inherit.
  • When a divorce takes place what is defined ‘matrimonial property’ or ‘non-matrimonial property’ can be of significance. The court will be more inclined to leave to one side non-matrimonial property if it can meet the reasonable needs of the other party from matrimonial property. A prenuptial agreement may attempt to define what falls into the category of non-matrimonial property –for example business assets owned by one of the couple prior to the marriage.
  • one or both of the couple may have children from a previous marriage or relationship and wishes to protect assets for the purposes of inheritance planning. This could also include a couple with grown-up children who are marrying or entering into a civil partnership later in life.
  • one or both of the couple may have a connection with, or property in, another jurisdiction.

As the law currently stands, in England and Wales pre-nuptial agreements are not strictly binding if there is a divorce or dissolution of the civil partnership. However, the terms of a pre-nuptial agreement may be decisive in the event of a disputed divorce/dissolution that is dealt with by the court unless the effect of the agreement would be unfair.

It is not possible in England and Wales to have a fully binding agreement before marriage or civil partnership about what will happen on divorce or dissolution. This would require a change in the law by Parliament. This is because the law of divorce is deliberately very flexible and gives the court a lot of discretion when deciding what is a fair settlement. The court must also try to meet the reasonable needs of both of the couple and any minor children.

In other countries, pre-nuptial agreements may be binding provided certain requirements are met. Where there is an international element advice will need to be sought from a specialist lawyer in that jurisdiction. (For example one or both of  the couple may not be a UK citizens and there may also be significant assets held overseas).

To improve the prospect that the court will not consider the agreement to be unfair if it is necessary to rely on it, both of you will need to set out your financial circumstances in full (called financial disclosure), and take independent legal advice on the agreement and its effects. You can negotiate an agreement using mediation or collaborative law, or by using solicitors to negotiate and draft the terms of the agreement on your instructions. Your family lawyer will help you find the process most suitable for you.

There is not a rule which says exactly how far in advance of the wedding or civil partnership that the prenuptial agreement should be finalised, however, the later that the agreement is finalised, the more open to challenge it may well be.

It is good practice to finalise the agreement in good time before the wedding or civil partnership ceremony (ideally a minimum of 21 days prior to the ceremony).

This is so that neither of the couple feels that they have been placed under any undue pressure to agree to anything. Dealing with financial disclosure, negotiations and legal advice can take time, so it is important to plan in advance.

If your finances, of one of the couple are complex (for example involving trusts, or international assets) then extra time will be needed especially if specialist advice is needed from an accountant or a foreign lawyer.

Prenuptial agreements are generally less likely to be considered to be unfair (or to put it another way – are more likely to be considered to be fair) if they were made recently, or if circumstances have not changed since the agreement was entered into. Also, if there is clear evidence to show that both of the couple knew exactly what they were agreeing when the agreement was made, both legally and financially, and without any undue pressure having been applied by the other.

It is usually a good idea to include provisions which require the agreement to be reviewed regularly – perhaps every three – five years, or when a specified ‘trigger’ event occurs, for example the birth of a child, or if either of the couple were to have health issues that  impact on your earning capacity.

If the prenuptial agreement is varied significantly or rewritten it will effectively become a postnuptial agreement. But, for the agreement to be most likely to be held to be effective – it should be treated as a living document and subject to regular review. The same is true with Wills. Everyone should have a will and they should review them regularly.

It is possible that the court can uphold part of a prenuptial agreement while deciding that a different part of the prenuptial agreement is unfair.

It goes without saying that these are not agreements that should be entered into lightly. No one should enter into a prenuptial agreement unless they intend to be bound by its terms later on.

As we have said above, a pre-nuptial agreement should be viewed as a process and the pre-nuptial agreement should be treated as a living document.

The extent to which the pre-nuptial agreement will be binding will only be found out after separation. Therefore, it is best to be as thorough as possible in the preparation of pre-nuptial agreement.

The guidance we have from the courts is that for the court to be satisfied that the agreement is fair, the following will be considered:

  • whether each of the couple had independent legal advice before signing the agreement.
  • whether there was full financial disclosure. This is not necessarily the level of financial disclosure that takes place at the time of the divorce – however both need to have sufficient information to make an informed decision on to whether to enter into the agreement with a full understanding of its implications.
  • whether the terms of the agreement are substantially fair, in other words: does the agreement provide for each of the couples basic needs to be met in the event of a divorce?
  • that neither of the couple felt pressurised by the other to enter into the agreement; in other words that there was no evidence of undue influence or duress
  • whether there was any fraud or misrepresentation by one of the couple in relation to the agreement, and
  • whether legal contractual requirements were followed when the agreement was made. These would include; a statement in the agreement that both of the couple intended to ‘create legal relations’ by entering into the agreement, and that the agreement is executed as ‘a deed’, which includes that it must be witnessed by an independent witness.

So, in other words, the best approach in our view is that:

  • the agreement should be prepared as far in advance of the wedding or civil partnership as possible. Really, it should be possible to get it finalised a good month before the wedding – that way everyone can focus on the wedding and not be distracted by ironing out wrinkles in the pre-nuptial agreement.
  • The agreement will have been drafted by a solicitor for one of the couple.
  • the other of the couple should also have instructed a solicitor at an early stage.
  • Financial disclosure is provided through solicitors. The financial disclosure should be full.
  • Ideally the agreement would be prepared using the collaborative family law process – which would involve a four-way face-to-face meeting – where the detail can be finalised. If that is impossible then if there is a paper trail showing that amendments have been made to the draft agreement – then this will be helpful if the agreement is ever tested.
  • The agreement should be reviewed regularly – at least every five years and certainly on the birth of any children or any other significant changes in circumstance (e.g. retirement or illness or incapacitation).

But remember that taking legal advice doesn’t necessarily make the agreement fair. The legal advice will be confidential – if the solicitor does not view the draft pre-nuptial agreement is fair – then their advice may well be a recommendation to their client not to sign it.

But it’s definitely better to err on the side of caution and prepare the agreement in a thorough and timely way – rather than leaving the agreement the last minute and trying to do the bare minimum.

The solicitor drafting the pre-nuptial agreement will have a template which will be a starting point. However, the pre-nuptial agreement is a very personal document between the couple, and it can include anything that the couple wants to include.

The pre-nuptial agreement does not just have to include what will happen if the couple divorce or have dissolution proceedings.

These agreements will normally focus on finances – but they can include other things that may be important to the couple.

The agreement doesn’t just have to include things that are legally enforceable. They can include agreements which can’t be enforced – but which are important to the couple in terms of providing clarity about how they are going to run their marriage/civil partnership.

There are certain things that couples usually think about when deciding how they would like to arrange their finances in the event of a divorce or dissolution, including:

  • what will happen to property that either is bringing into the marriage?
  • what will happen to the family home?
  • what will happen to any property given to either or inherited during the marriage or any income or assets derived from trusts?
  • what will happen to money held in joint accounts and any property purchased jointly?
  • what will happen to any personal belongings or possessions owned before your marriage, or acquired during the marriage?
  • what will happen to any saved money earned during the marriage?
  • what will happen to pensions?
  • how will any debts be dealt with?
  • will either of the couple either pay or receive any maintenance and, if so, for how long?
  • when will the agreement be reviewed – will this be after set periods of time or after specified events?
  • will the agreement to be confidential. In other words that the agreement made clear that neither may disclose any of part of the agreement (save for the purpose of taking legal advice) to a third party or to the press?
  • what kinds of arrangements will be made for any children or possible children both in financial and in practical terms? This could also include reference to adult children.
  • what arrangements should be made in case either might die during the marriage? It may well be a good idea to make a will at the same time. The pre-nuptial agreement could include a commitment to keep wills up to date.
  • who will pay the costs regarding preparation of the agreement?

What a pre-nuptial agreement cannot do is to prevent either or both of the couple from making an application to the court for financial provision if their marriage or civil partnership fails.

The pre-nuptial agreement will be of evidential value in the financial provision proceedings – but the judge doesn’t have to hold either or both to the agreement if the judge takes the view that the agreement is not fair.

The pre-nuptial agreement cannot restrict any application for financial provision for children either.

What the pre-nuptial agreement will include will be a schedule which will normally list and or summarise the financial disclosure that has been shared.

The pre-nuptial agreement will also include confirmation that both have taken legal advice. Often the agreement will be signed by both solicitors.

If one of the couple decides not to take independent legal advice, then there will need to be a clause saying that they have had the opportunity to do so and that they intend the agreement to be legally binding. This is not ideal. If both of the couple are committed to the pre-nuptial agreement – then it should be very easy to ensure that both take legal advice before the pre-nuptial agreement is signed.

Because the pre-nuptial agreement is made in anticipation of marriage or civil partnership, there will be a clause saying that the agreement becomes effective once a valid marriage or civil partnership has been entered into.

A pre-nuptial agreement will not be allowed to prejudice the interests of any children in the family.

As we have said above, the prenuptial agreement should be viewed as a living document. If the couple are of an age where they are likely or possible they will have children together, then there really ought to be provision to review the agreement after children arrive. Because the needs of children change as they get bigger, it follows that there should certainly be ongoing reviews as well.

If the marriage or civil partnership were to fail and one of the couple makes an application to the court for financial provision, then the first consideration of the court will be the needs of any minor children. What the needs are of the children will be viewed in the context of the marriage. It would therefore not be acceptable in a marriage where there has been a very good lifestyle and there is good income into the family good access to money when needed, for the prenuptial agreement to make the bare minimum of provision for the couples children.

It is not possible to contract out of a legal obligation to provide financial support for a child of the family.

Different countries have different rules regarding pre-nuptial agreements.

We specialise in the law of England and Wales. We do not advise clients in respect of the law of other countries. If one or both of the couple has a significant connection to another country – then they should seek legal advice in each relevant country. This could include a country where either has assets, or habitual residence, or citizenship. It could also include a country where a couple might be planning to make their home.

Different countries may have different interpretations of fairness. Some may recognise pre-nuptial agreements. Others may not recognise them at all.

A prenuptial agreement will usually include a clause which confirms that both of the couple are domiciled and/or are habitually reside in England and Wales and that if the marriage or civil partnership were to break down it is agreed that the divorce or dissolution would take place in England and Wales. If the couple preferred the divorce to take place in a different jurisdiction – then they could be a clause saying this.

If the prenuptial agreement was intended to be used in a different country, we would normally expect the prenuptial agreement to be prepared by lawyers from that country.

Having a pre-nuptial agreement is not for everyone – but it can be for some couples.

The basic idea is to provide certainty as to financial arrangements in the event of a divorce or dissolution of civil partnership.

The process of agreeing the terms of and entering into a pre-nuptial agreement could assist the couple to address what might be thorny issues if they separated, but at a point where they are getting on very well. This could provide clarity. This clarity could avoid disputes later on, and it could also support the relationship and the marriage or civil partnership.

If one or other has received or is to receive a significant inheritance, or if one or other has children from a previous relationship or if there are other financial factors – then having this clarity can be very helpful.

If however one of the couple wanted to use a prenuptial agreement to try and bully or pressure the other into agreeing to something that was not fair (which might include not providing financial disclosure and trying to prevent them from taking legal advice), then a prenuptial agreement is unlikely to give them what they want.

These are very much agreements which should be entered into with knowledge and eyes open. They should not be rushed and corners should not be cut. However they can provide certainty and clarity.

A prenuptial agreement which is patently unfair will simply provide a false sense of security and that one of the couple wanted to try and use a prenuptial agreement in this way might be an indicator that the marriage or civil partnership may well be one that is not going to be durable.

As we have said above – clarity and certainty can be good – but they need to accompany fairness. The prenuptial agreement should be viewed as a living document and therefore the agreement should be adapted if there are changes in circumstance.

If there is a divorce or dissolution of civil partnership and one of the couple no longer wishes to be held to the contents of a pre-nuptial agreement, then there will need to be a preliminary court hearing to decide whether the court will uphold the agreement or not (and if so to what extent).

If the pre-nuptial agreement has been prepared carefully (with disclosure and legal advice) and both have entered into the agreement with their eyes open, and there have been reviews, and the contents of the agreement remains fair – then the court may well not agree to one of the couple trying to get out of the agreement.

If on the other hand, the formalities have not been carried through and the agreement was rushed, one was pressured to sign, there has not been disclosure, there have been changes in circumstances – then the court may well decide that the pre-nuptial agreement can be ignored.

If during the marriage the couple decide that the prenuptial agreement is no longer valid and they do not wish either to be held to it – then because of the nature of the prenuptial agreement it would be sensible for there to be an exchange of solicitors letters confirming that each has taken legal advice and both have decided that the pre-nuptial agreement is no longer valid.

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