THE MARSHALL & GALPIN GUIDE TO PRENUPTIAL AGREEMENTS
It is important to realize that Prenuptial or Premarital Agreements are not enforceable in the English Courts. The Court retains jurisdiction to decide how assets should be divided between parties in the event of a divorce or separation, and the Court will not be bound by any Prenuptial Agreement. The English Law is unusual from this point of view as many other countries including America, Australia and New Zealand and many European countries do regard Prenuptial Agreements as binding. If a Prenuptial Agreement is entered into abroad and the parties divorce in England the English Courts will still not be bound by the agreement.
The English Courts have begun to take some notice of Prenuptial Agreements. Whilst a Judge will not be bound by those agreements it is a factor that a Judge may take into account when deciding any financial application. In recent cases Judges seem to have been taking more notice of Prenuptial Agreements, in these cases the Judges have not followed the provisions of the Prenuptial Agreements precisely, for example where the Prenuptial Agreement has limited the money a wife is entitled to following a divorce Judges have awarded the wife more than the sum provided in the Agreement but less than the wife might have received if there had been no agreement.
A few years ago the Government reviewed the Law relating to Prenuptial Agreements. It was suggested that Prenuptial Agreements might become binding but so far the Law has not been changed. The Government proposals provided that if a Prenuptial Agreement were to be binding it would have to be signed by both parties at least 21 days before the wedding to avoid any suggestion that one party had been put under pressure at the last minute. It is therefore good practice to ensure that Agreements are signed at least 21 days before the marriage.
An Agreement will only have any effect if both parties had all the information about finances available and both parties received independent legal advice before the Agreement was signed. It is therefore important for each party to have their own solicitor and for full details of the parties' finances to be recorded either in the Agreement or in a document attached to it.
Some Prenuptial Agreements try to set out the arrangements relating to any children in the event of a marriage breakdown. The Government proposals provided that arrangements relating to children would not become enforceable, it is therefore unlikely that arrangements relating to children in a Prenuptial Agreement would have any significant effect on orders that might be made by a court following the breakdown of a relationship.
Although Prenuptial Agreements are not strictly enforceable they can be appropriate in some cases, particularly as the Courts now seem to be taking more notice of them. A Prenuptial Agreement may be appropriate where one party is much wealthier than the other and wants to try and ensure that in the event of a divorce the other party cannot start by claiming half of the total assets.
The other situation in which Prenuptial Agreements are sensible relates to second marriages, particularly if there are children from the first marriage. The children’s parents may well want to ensure that any money or property that they have at the time of the marriage is preserved for those children, rather than going to the new husband or wife.
The extent to which a Court will take notice of a Prenuptial Agreement will depend on the particular circumstances of each case, it is likely that if the marriage is a short one a Court will take much more notice of the agreement than for a long marriage. Similarly the birth of children may affect the Courts view of the Agreement, particularly where this affects the mother’s ability to work.
Prenuptial Agreements should be tailored to deal with each particular couple but often include some of the following provisions:
(i) The Agreement may provide that the husband and wife each retain any property they own prior to the marriage and that the other party will not have any claim on that property.
(ii) The Agreement will often contain provisions dealing with the home the parties are intending to buy, setting out the share the husband and wife will own in the home and sometimes the contributions each party will make to the running of the home.
(iii) The Agreement can set out what will happen to any items purchased by the couple jointly after the marriage, for example, some Agreements provide parties shall be entitled to property in shares in which monies were contributed.
(iv) The Agreement can provide that on the death of the husband or wife the survivor will not be able to make any claim against his/her estate. This may be important to protect children/step-children because otherwise if one party makes no provision for the other in his or her Will the other can establish that he or she was a dependent and a Court can in effect re-write the provisions of the Will.
(v) Some Agreements, particularly American Agreements, do set out the arrangements for children but as indicated above it is unlikely that such agreements would be enforced by the Courts.
One word of warning – in rare cases engaged couples have found it so difficult to agree the provisions of a Prenuptial Agreement that in the end the wedding has been called off!
For further information, please contact:-
James Stonham (Thame) 01844 219102 email - mailto:james.stonham@marshallgalpin.com
Simon Bassett (Abingdon) 01235 557008 email - mailto:simon.bassett@marshallgalpin.com
Mark Phillips (Oxford) 01865 268630 email - mailto:mark.phillips@marshallgalpin.com
Angela Davies (Thame) 01844 219110 email - mailto:angela.davies@marshallgalpin.com
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