A pre-nuptial agreement … for better, for worse, for richer, for poorer … is it better to have or have not? Rebecca Silcock, Specialist Family Lawyer and Partner at Mogers Drewett explores.
For many couples, this is still a difficult question. Some people think they are not legally binding, unromantic or unfair to the economically weaker party, but nuptial agreements are commonplace in many overseas countries and as people are marrying later, by the time they do, they often have pre-marital assets they wish to protect. Also individuals marrying for the second or third time may understandably want to protect children and assets from a previous marriage. So can we expect a pre-nup to become commonplace here in the future? From a legal perspective, since a landmark decision by the UK Supreme Court in 2010, a nuptial agreement properly entered into should be upheld unless there is a good reason not to, so long as it was entered into by both parties freely and with full appreciation of the consequences. The Law Commission proposes that such an agreement should be legally binding as long as it meets the financial needs of both parties and any children; is contractually valid; was made at least 28 days before the wedding; is properly signed; both sides have given proper disclosure of their resources and both parties have received independent legal advice.
If the agreement clearly ticks these boxes and the client has been properly advised, this goes a long way to ensuring such an agreement can stand up to challenge. However until there is legislation, a nuptial agreement is not necessarily binding.
Does this mean there is little merit in contemplating an agreement until the legal status is clear? The answer is most certainly “no”. Transparently, debt protection and certainty are just some of the reasons to have one. A nuptial agreement should form an active part of wealth management; a dramatic increase in the price of farmland for example has driven farms to seek nuptial agreements to protect their farms for future generations. These agreements establish a framework in which the parties to a union can critically examine and customise their financial agreements, effective in the event of a relationship breakdown. Importantly, a nuptial agreement can save costs. It is cheaper to negotiate a nuptial agreement than to embark on costly proceedings at a later date and have a court impose an outcome which is unlikely to be acceptable to both.
So when your beloved proposes this Christmas and you talk about setting the date, as you look to the future consider adding a nuptial deed to the pre-wedding checklist.