Mandeep Benning, a Family Law solicitor at London law firm Fisher Meredith, gives helpful advice on what you need to consider before entering into a Pre-Nuptial agreement.
The date is set, the dress has been bought, even the honeymoon has been booked well in advance… the only thing left to discuss is the matter of finances. Not wedding budgets, more like ‘who will get what if this does not work out?’
For many prospective brides and grooms (namely our American and European counterparts) Pre-Nuptial agreements are considered a usual part of the wedding planning process. We in England and Wales however have been reticent to follow suit, that is, until recently.
Ante-Nuptial agreements, as they are more formally referred to, have notoriously been considered a device purely for the rich or famous and in fact have scarcely been enforced or encouraged by the English courts. Recent developments however have changed this view. Pre-Nups are now considered to carry weight in the English courts, and in some circumstances indeed decisive weight.
With more people entering subsequent marriages or getting married later, Pre-Nuptial agreements are more frequently being used as a form of protection to avoid that ‘messy divorce’ less dependant upon whether you have sizable assets to protect, or a less substantial nest egg that you’ve worked hard towards attaining. That said, before you decide whether a Pre-Nup is right for you, there are a number of questions you should consider:
‘What is it that I am agreeing to?’
Although the courts respect a party’s autonomy to an extent, it is important to obtain legal advice for this position to be promoted. One of the major factors in the enforceability of a Pre-Nup is whether or not you were fully aware of the implications of what you entered into. As a minimum, you should obtain legal advice explaining to you the effect the agreement has on your legal rights upon divorce and the advantages and disadvantages that signing it may have for you.
Another key reason to ensure that your Pre-Nup is explained to you by a qualified legal advisor is to protect you, a possibly vulnerable party, from the effects of pressure. Being forced into or pressured into signing a Pre-Nup may well render that agreement invalid. So if you want to sign, be sure. Do both of you intend on the contents as set out in the Pre-Nup to be effective? Speak to a solicitor specialising in marital agreements.
Bear in mind, though it may sound obvious, to make sure that the agreement is in writing. Unlike the law of contract, the law governing pre-marital agreements requires that the Pre-Nup be explicitly set out in writing and not merely discussions of your intentions, make sure it is properly drafted and contains exactly what you want it to cover.
‘Do I know the full picture?
A lot of the time people entering into Pre-Nups only want to protect certain types of property. It is possible to use the Pre-Nup to “ring fence” and protect non-matrimonial property (acquired pre-marriage, gifted and inherited property) as against matrimonial property.
Whatever the circumstances, if you are entering into a Pre-Nuptial agreement, you both need to be satisfied that you are aware of the other’s complete financial position. (In some other jurisdictions where Pre-Nuptial agreements are considered binding, it is possible for a party to waive the need for the other to disclose assets.)
In this country, if you do not receive full and frank disclosure of all your fiancé(e)’s financial assets, the agreement that you enter into would not be binding in relation to the hidden asset or property, so the court could still award financial relief from any asset that you do not disclose. Make sure if you want the Pre-Nup to protect everything that you fully reveal all matters to your partner before you both sign on the dotted line.
‘What do we have?’
If you both have limited financial means, then the courts will apportion whatever limited resources you both have in order to meet your needs, and most importantly, the courts will give priority to housing any children and the parent who lives with them. A Pre-Nuptial agreement in these circumstances will be futile. The court will not enforce the Pre-Nup if it does not provide for both of you and the children.
Similarly, agreements which leave one spouse dependent on state benefits will not carry much weight, at least where that could be avoided by distributing your joint resources in a different way on divorce (or dissolution of your civil partnership).
You need to seriously consider whether yours is a case where a Pre-Nuptial agreement is necessary or even relevant, before incurring the costs of having one drawn up.
What about the kids?
Following on from the point above, if either of you have children that live with you (be they from a previous relationship or the current union), are the children’s needs met by the terms of the Pre-Nup? If not, then the Pre-Nup will be invalidated. “A nuptial agreement cannot be allowed to prejudice the reasonable requirements of any children of the family.”
How close is the big day?
If the wedding is imminent, there will probably be a greater risk of pressure to sign the proposed Pre-Nup. Although there is not a ‘cut off point’ whereby you must sign and finalise the agreement before the marriage (as is the case in some other countries), you must consider the time you choose to sign very carefully. Though the Law Commission propose that there should not be a time limit to invalidate an agreement, the courts have shown reluctance to enforce agreements entered into on the eve of a wedding.
Signing a Pre-Nup while steaming your dress the night before the big day, is not a good idea!
How sure can we be?
No one can really guarantee at the outset of a marriage what the consequences of time or significant events will bring (for example the birth of children, one of you suffering a serious illness, unemployment, or business failure). So, should there be a ‘sunset clause’ included in your Pre-Nup, stating that the agreement should cease to have effect after a certain period, i.e. the longer the marriage the less relevant the Pre-Nup on divorce years later? This is something that is being considered by the Law Commission, though the there may be difficulties in formulating these restrictions.
Lastly, and above all, it is important to remember that, no agreement can depose the jurisdiction of the court in England. When one of you applies to the court for a financial remedy, the courts will have the overriding power, and not your Pre-Nuptial agreement. The courts will ultimately decide how your assets are divided to suitably provide for both of you and the children. So although the Pre-Nup will be significant, you cannot set into stone a contingency plan for divorce, though if you sensibly consider everything above, there is more chance you can expect to retain some control.
To discuss any of the issues raised or to receive advice on any other Family Law matter, please contact Linda Hawkes at linda.hawkes@fishermeredith.co.uk on +44 (0)20 7091 2747 or her assistant solicitor, Mandeep Benning at mandeep.benning@fishermeredith.co.uk, on +44 (0)20 7091 2757.
Please visit Fisher Meredith’s website www.fishermeredith.co.uk.
