Prenuptial and Postnuptial Agreements
Prenuptial and postnuptial agreements are not yet legally binding in the UK but since the ground breaking case of Radmacher in 2010 the courts have started to take these agreements into account as a factor in their decision making process when considering division of the matrimonial assets. Recent case law suggests that the courts are struggling to find a balance between granting the parties autonomy over their financial futures and using the court’s discretion to achieve fairness.
In order to ensure the agreement is upheld it must be properly drafted. Both parties must have received or had the opportunity to receive independent legal advice, given full and frank financial disclosure, entered the agreement at least 21 days before the marriage, taken into account significant changes in the future and the agreement must be fair and realistic.
Having said that the courts have made it clear that the parties cannot by agreement ignore the jurisdiction of the court. In the interest of fairness the courts will consider all the circumstances of the case and each case will be judged on its own merit.
Lord Justice Thorpe has said “it does seem to me that the role of contractual dealing, the opportunity for the autonomy of the parties, is becoming increasingly important”.
These agreements are not only for the super wealthy but also for those who bring some money and/or assets to the marriage, people who may be likely to receive an inheritance, or for second marriages where a person may want to protect assets recovered or preserved in a previous divorce.
The law commission has recommended that nuptial agreements should become legally binding as long as they are on a prescribed form and adhere to certain safeguards. Family lawyers are watching and waiting for further updates.