Pre-Nuptial and Post-Nuptial Agreements
Pre-nuptial and post-nuptial agreements have been becoming increasingly common over recent years, but, at present, are still not formally recognised as a part of English law. The Law Commission has recently looked into this further and have recommended that such agreements should now become a part of matrimonial law, subject to certain conditions.
However, although these agreements are not yet formally recognised, where parties have entered into one and the marriage subsequently fails, the existence of a pre or post-nuptial agreement is something which the Court will have serious regard to.
Both parties must be aware that no agreement between them can override the legislation which is in place to govern how a Court deals with financial and property matters within matrimonial proceedings and cannot take away the Judge’s discretion to decide upon the appropriate division of assets on a divorce. This means that a pre or post-nuptial agreement cannot stop a spouse applying to the Court for financial provision from the other when divorce proceedings have been issued, but the case law is such that the Court should give effect to a pre or post-nuptial agreement that is freely entered into by each party, as long as each party has a full appreciation of its implications. It is increasingly common that the Court would seek to uphold such an agreement unless it feels that it would be unfair to hold the parties to their agreement for some reason, usually because of some unforeseen event which has changed the circumstances of the parties.
In other words, if a couple enter into a pre or post-nuptial agreement, they should do so with the intention and the assumption that it will be binding.
There are various safeguards which need to be in place in order to ensure that the agreement is given serious consideration by the Court in any subsequent divorce proceedings and it is important that advice is taken well in advance of a wedding to ensure there is plenty of time for the couple to discuss how they want to approach it and for the agreement to be drawn up. That said, a couple can have an agreement drawn up after they are married, this being a post nuptial agreement but the same principles apply.It is not only couples who are looking at setting up home together who can enter into such an agreement. Even if a couple have been living together for any length of time, a living together or cohabitation agreement can be drawn up if both parties are happy to enter into it.
Although it can be a difficult discussion to have with your intended, pre-nuptial agreements can save parties both money and additional stress and upset if the marriage breaks down and can also provide some assurance to family members where money or property is being gifted, lent, or inherited, in that it can show what is intended to happen to such money if the parties go their separate ways. Such agreements can also be particularly important where the couple have children from previous relationships and want to preserve assets for those respective children should the relationship fail.
As unromantic as it seems, discussing a pre-nuptial agreement is definitely something which should be considered where one or other party is coming into the marriage with assets which he or she wishes to preserve. Of course, everyone would hope that the agreement may never have to be relied on, but for most couples the peace of mind that it brings makes the existence of such an agreement well worth it.
by Melinda Smith from the Wisbech office