Prenuptial agreements

Prenuptial agreements

Prenuptial agreements

A prenuptial is a formal agreement that couples enter into before getting married to specify how their finances and assets will be divided should they split up.

Enforceability of a prenuptial agreement

Enforceability in England, Wales and Northern Ireland

Although prenuptial agreements are not legally enforceable in England, Wales and Northern Ireland, they do carry more weight since the judgement in the Supreme Court case of Radmacher vs Granatino. This is because they are no longer seen as 'contrary to public policy' - i.e. no longer seen as perversion of justice or harmful to the state and the public. Courts should give effect to such agreements when deciding on settlements. This means that the terms of the agreement should be implemented when certain criteria are met. Some such criteria include that the court must, at the time of the separation, be in a position to find that:

  • The agreement was entered into freely, voluntarily and without undue pressure
  • Both you and your partner fully appreciated its implications and offered full disclosure of all relevant information
  • Both you and your partner intended the agreement to be effective and to govern the financial implications of divorce (it would probably be inferred that this was the case for any such agreement governed by English law that was entered into after 20 October 2010)
  • It would be fair to hold the parties to the agreement at the time of the divorce

It is therefore important that you and your intended spouse ensure the following when entering into a prenuptial agreement:

a) Full and frank disclosure

Each party must have made a full and frank disclosure to the other of their financial wealth. If either of the parties is not open and honest about the extent of their wealth the court -might not be satisfied that both parties understood the true financial implication of the agreement.

b) Free choice

Each party must have freely entered into the agreement. This will not be the case where one party has put undue pressure on the other to sign or enter into the agreement.

c) Independent legal advice

Each party must have had independent legal advice on the terms and effect of the prenuptial agreement. Without legal advice it may be difficult to prove that you or your spouse entered into the agreement with full appreciation of its implications.

d) Time

There must be a reasonable period of time between the wedding day and the date that your agreement is signed. This is to assist in showing that the agreement was not entered into under duress.

e) Keeping it updated

The longer the marriage and the greater the changes in the circumstances of the spouses, the less likely it might be that the courts will be able to find that the prenuptial agreement remains fair at the time of the divorce action. Aspects such as growth in the size of the family and any sacrifices, financial or otherwise, which one of the parties has to make to be the home maker and to bring up the children, must be provided for in the prenuptial agreement. You should therefore plan to have this agreement reviewed on a regular basis.

Enforceability in Scotland

In Scotland, prenuptial agreements are legally binding documents and as a result you should consider taking legal advice before entering into one

Key elements of a prenuptial agreement (UK wide)

The contents of a prenuptial agreement will depend on the requirements of each couple. A good prenuptial agreement will ensure that a couple's financial interests are protected whilst attempting to avoid future legal action should their relationship end.

Generally the following items should be considered when writing a prenuptial agreement:

  • In the event of a divorce, whether any religious ceremonies need to be complied with such as obtaining a get, annulment or dissolution of marriage
  • Details of separate assets and joint assets
  • Specification as to how joint assets will be divided if the marriage comes to an end.
  • Details as to how the marital home will be owned

When to do your prenuptial

Planning your wedding day can be a stressful process and, as a result, it could easily be argued that either party was under stress at the time of signing and did not have enough time to reflect on the matter. Before your prenuptial agreement is finalised, you will need to allow enough time to obtain legal advice as to its terms and conditions. Therefore it is recommended that you sign the prenuptial agreement no later than three months before your wedding day.

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