Divorce reforms to give force of law to pre-nuptial agreements
Pre-marital agreements aim to keep assets brought into marriage under original ownership should the marriage fail later. They are commonplace in the US, but although use has been on the rise in recent years, a far smaller percentage of the 250,000 couples who marry each year in the UK use them because they haven't been legally binding. Under new plans proposed by the Law Commission, this is likely to change.
What changes have been proposed?
Currently pre-nuptial agreements are not legally enforceable, but rather taken into account by judges at their discretion. Final divorce settlements given can vary from the agreement. With the passing of the new Bill however, each new contract would have the force of law, and some previous contracts may also be rendered enforceable.
The proposal, which will be published in February 2014 and which will include a draft Bill, will address the issue of ownership of property brought in to marriages. This will provide couples with the chance to protect any assets or gifts they wish to remain in their possession should they divorce. The new plans will also address the issue of post marital maintenance, which the Law Commission suggests is seen as a “meal ticket for life”, by reducing and eventually removing the option of unlimited payments.
What will the government’s proposals achieve?
The Government hopes to reduce the number of marriages ending in expensive and drawn out court battles by improving couples' rights to property protection. It hopes that by clarifying the principles of division of assets and future income, more couples should be able to resolve matrimonial disputes without needing to involve lawyers. In turn, it is hoped that this will remove a barrier for many couples who fear marrying in case later the relationship ends in expensive litigation. Clearer rules about divorce are hoped to increase the marriage rate.
The acceptance of the reforms is also likely to prompt the Law Commission to build safeguards in order to protect both spouses from becoming financially unstable in the event of a divorce. The proposal’s removal of unlimited maintenance payments may force each person to regain independence within the specified time limit.
Another potential consequence of the changes is the removal of subjectivity within divorce cases across UK courts.
Many lawyers believe that different courts tend to favour one party to a different degree than others. When judges have such wide decision making ability, they tend to give settlements based on personal moral opinions, rather than on principals that are applied uniformly across the country. This has in many cases led lawyers to advise their clients to seek divorce in a court where the outcome is likely to be beneficial, rather than use the nearest court, which may be cheaper.
Knowing that a judge tends to hold a certain opinion of a set of circumstances also reduces the willingness of one side to fight the case - he assumes that he is more likely to lose and therefore seeks an out of court settlement which may be more favourable to the other side than a judge in another court would award.
How will the changes affect divorces in the UK?
It is widely predicted that, as a result of the proposal, there will be a surge of interest in pre-nuptial agreements. But how will this effect divorce and spouses?
One potential effect of the reform in an increase in remarriage, particularly for older couples who have substantial personal assets. A number of divorcees avoid a second marriage following an unsatisfactory settlement or an excessively harrowing court battle at the end of a previous marriage. Legally enforceable pre-nuptial agreements would provide them with the financial security necessary to abolish any lingering fears regarding remarriage.
Legally binding pre-nuptial agreements could also revive the marriage rate by removing fears that a partner is simply marrying for money rather than love. Instead of quietly harbouring financial concerns, couples would be able to protect their property beforehand so that the decision becomes a purely romantic one.
However, there have been concerns that the reforms could have a negative effect on the duration of marriage by removing the need for trust and commitment between two people. When assets can be protected so much more easily, there is less of a requirement to build the mutual trust that is required without the security of a contract. More people may marry, but the long term social stability that the Government believes marriage brings may remain as elusive.
Net Lawman sells two templates that allow you to make your own pre-nuptial agreement. They can be downloaded here.
Please note that the information provided on this page:
- Does not provide a complete or authoritative statement of the law;
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