What is a pre-nuptial agreement?
A pre-nuptial agreement (often just called a pre-nup) is a document created before marriage or civil partnership in which a couple sets out how they wish their assets to be divided in the event of divorce. Assets that the document might cover include: wealth, property, income, inheritance and debts; whether they are acquired individually or jointly, before or during the marriage.
Is a pre-nup legally binding in the UK?
No. The agreement is not legally binding.
There has been much discussion in political and legal circles about whether it should be, but judges have expressed fears that if they were binding, it would open the door to one party being disadvantaged when the time came, perhaps many years later, for financial settlement following divorce.
The legal position has however moved in the direction of acceptance. Today, a judge is likely to give weight to what has been agreed, even though he will not enforce it.
The weight given will depend on his assessment of the fairness of the deal when made, and the capacity of the weaker party to have said no at the time. Account will also be taken of the fairness in the circumstances that have arisen over the years, by the time of the financial settlement.
Under Section 25 of the 1973 Matrimonial Causes Act the Court must "have regard to all circumstances of the case". A pre-nup agreement that is fair, which meets the requirements of the act and is freely and knowingly entered into will be considered.
A significant precedent
The case of Radmacher vs Granatino in 2009 is a clear indicator of the increasing importance which the courts give to pre-nups. In this case, Mr Granatino was initially awarded £5.8 million of Miss Radmacher's personal wealth of about £100 million, despite an agreement to the contrary, which they had made in her home country.
Following appeal by Miss Radmacher this amount was revised to £3.6 million, £2.5 million of which was just a loan to be paid back after their children reached the age of 18. Their pre-nup agreement was the decisive factor leading to the second judgement.
The appeal judge said he believed it had become "increasingly unrealistic" for courts to disregard pre-nups: "It does not sufficiently recognise the rights of autonomous adults to govern their future financial relationship by agreement."
Are prenuptial agreements enforceable?
For an agreement to be considered by the Court, it must not conflict with the overriding requirements of Section 25 of the 1973 Matrimonial Causes Act. A summary is set out below.
First and foremost, provisions must be made for the welfare of children in the family under the age of eighteen. Then, in order to determine how the assets of the marriage are split, the court will consider:
- the financial resources available to each party
- their financial needs, obligations and responsibilities
- the standard of living of the family before the breakdown of marriage
- the age of each party and the duration of the marriage
- physical or mental disabilities of either party
- the contributions which each party have made to the family, including looking after the home or caring for children
- the value to either party of any benefit which they would lose the chance of acquiring (e.g. pensions)
How to make sure your pre-nuptial agreement is upheld
Before entering into an agreement, the following safeguards should be followed to maximise the chance that it is upheld in court if needs be.
- it must be made at least 28 days before marriage
- there must be no pressure or duress to sign
- full disclosure of both parties' assets must be made
- the agreement should be fair and realistic
- provisions should be made for children, alive or yet to be born
The agreement may be disregarded by court if there is deemed to have been a change of circumstance which renders it inappropriate (for example the birth of children, disability, loss of employment, etc).
For this reason it is a good idea to review your agreement periodically or if there is a change in circumstance, so that it would still be regarded as fair in court. This would also reduce the likelihood that it would not be enforced due to the length of time elapsed since it was made.
Useful documents and further information
If you think a pre-nuptial agreement is for you, you might be interested in using one of our prenup templates to write your own.
If you aren't sure, you might be interested to read about the reasons why you should make one.