Laura Johnson, solicitor, on

Pre-Nups & what the Law says about them

“Pre-Nups” are certainly becoming more popular in the UK. Only recently did we report an increase in enquiries about such agreements. It might be the influence of celebrities or simply due to the fact that financial circumstances for a soon-to-wed couple are significantly more complicated now than in years gone by. Either way, they are becoming increasingly relevant and it is important that couples at least think about whether they need such an agreement before marrying.

Earlier this year, the Law Commission published a report that recommended making nuptial agreements enforceable contracts. The Government is in the process of reviewing the recommendations and will issue a full response in February 2015. Just last week, the House of Commons Library published a standard note on pre-nuptial agreements confirming how such agreements are currently being dealt with by the Courts and how they may be dealt with in the future.

What is a Pre-Nup?

A pre-nuptial (or pre-marital) agreement is an agreement made by a couple before they marry or enter into a civil partnership, which sets out how they wish their assets to be divided if they should ever divorce or have their civil partnership dissolved. The agreement may be updated after the marriage or civil partnership as the couple’s circumstances change.

What does the law say about Pre-Nups?

Pre-nuptial agreements are not automatically enforceable in Courts in England and Wales, but the Courts have recently been paying more attention to such agreements when deciding how to divide assets at the end of a marriage or civil partnership. The main case in this area remains to be a case from 2010, in which the Supreme Court held that the Courts should give effect to a pre-nutpial 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. This has been further enforced in a judgment that was delivered earlier this year.

What are the benefits of having a Pre-Nup?

If a couple do not enter into a pre-nuptial agreement and the marriage or civil partnership then breaks down, the couple faces the difficult task of trying to divide assets fairly at a time when communication between the parties may be at an all-time low. If the couple cannot reach an agreement then they will need to apply to the Court, which has very wide discretion in deciding how best to divide the assets. The process can be long, frustrating and very costly. If the couple have a pre-nuptial agreement in existence then it can serve as a very useful point of reference that will encourage a more amicable agreement and even avoid the need to go through the lengthy Court process.

Should couples enter into a Pre-Nup?

Couples thinking about entering into a pre-nuptial agreement should not be deterred about what they may have heard about in the news or the prospect of it not being enforceable. The fact is that couples today are marrying older than in previous generations; by which time the individuals have accumulated their own personal wealth and assets. If the couple do face separation then the agreement can be extremely helpful to help harness the couple at a difficult time and be used as a template for reaching an agreement more amicably.

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