With recent changes to UK divorce law allowing applications of no-fault divorces as well as separating couples being able to apply for a divorce on line, should prenuptial agreements (PNAs) evolve to have more legal standing?
A PNA is a contract between a couple, before they marry, setting out how finances and other assets will be divided in the event of the relationship ending in divorce. It can help couples avoid nasty surprises in terms of their finances at an already distressing time.
In Scotland, the Family Law (Scotland) Act states that, so far as the couple were sound mind at the time of making an agreement and it was seen as reasonable and fair a PNA agreement will be legally binding. This is a contrast to England and Wales, where although a PNA has begun to give wait to a decision regarding finances in a divorce, it is not legally binding.
In the landmark case of Radmacher v Granatino, the validity of a PNA was called into question, the outcome set a precedent and confirmed that:
“‘the court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement’. Baroness Hale added that ‘this area of law is a mess and ripe for review.”
The Family Justice Council, in 2014, published a recommendation with an aim to introduce a draft bill making PNAs or ‘Qualifying Nuptial Agreements’ legally binding, provided certain conditions and safeguards were met, this again has not been implemented by the Government. At present there is a draft bill awaiting its second reading in the House of Commons, 9 months after it was introduced. The Divorce (Financial Provisions) Bill, would introduce legislation making prenuptial agreements valid should they meet the requirements, including obtaining independent advice prior to the agreement.
Recent cases have been giving weight to PNAs, however the Court will still use its discretion if it feels that the needs of both parties and any children are not being considered or seen as unfair, as in Brack v Brack.
Agreements must also be seen as validly created; Mostyn J in Ipecki v McConnell rejected the PNA due to the fact that the husband did not have ‘a full appreciation of the implications of the agreement when he had no legal advice at all about the impact of New York law’.
Donna Rose, Family Solicitor and Mediator at Amphlett Lissimore said:
“The shape of the modern family is becoming more diverse. The incidence of a couple marrying in their early 20’s starting out with nothing financially and building up their joint finances are lessening.
“The divorce rate is high, as are second and subsequent marriages. For those who enter a marriage with pre-acquired property, their wish to safeguard it in the event of divorce is understandable, as is their wish to financially protect any children from a former marriage.
“In the absence of legislation, the Court has confirmed that adults marrying freely with full financial knowledge can make fair arrangements that suit their particular circumstances. So as long as the welfare of any subsequent children are provided for, I believe that prenuptial agreements should be recognised with certainty in family law. This is because it occurs consensually when the relationship between the couple is loving and ongoing and hence there is a sense of “fairness” is unclouded by the bitterness of a separation.
“It may also in fact have other benefits outside of the law, for example, a prenuptial agreement could serve to help in building the relationship and trust between the children and their future step-parent if they know their parent is marrying for the right reason.”
With more couples marrying later in life, second marriages involving children and couples wanting to ring-fence assets, should the Government be acting quicker to give couples greater certainty and more financial control through legally binding PNAs, before they enter a marriage?
