26th January 2022
26th January 2022
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4 - 1 vote
A pre-nuptial agreement is an agreement which is made between two persons before they marry or before they enter into a civil partnership. The agreement will set out how the parties would like their assets to be divided between them in the event that they choose to divorce or dissolve their civil partnership in the future.
This guide will address some common misconceptions about pre-nuptial agreements. It should be noted that this guide is relevant to the law relating to pre-nuptial agreements in England and Wales.
One of the most common misconceptions that people have regarding pre-nuptial agreements is that the Court will not consider any such agreement.
It is true that pre-nuptial agreements are not technically legally binding in the Courts of England and Wales. This means that Court is not obliged to follow the exact contents (or in fact any of the contents) of a pre-nuptial agreement when making a financial order under the Matrimonial Causes Act 1973/ Civil Partnership Act 2004.
However, it has been confirmed through caselaw (Radmacher (formerly Granatino) v Granatino [2010] UKSC 42) that a pre-nuptial agreement which has been freely entered into should be considered by the Court when it is dealing with the division of assets during financial proceedings, unless there are circumstances to show it would not be fair to do so.
This means that the Court should give appropriate consideration to a pre-nuptial agreement when making a financial order.
Pre-nuptial agreements are associated with marriage. However, agreements regarding the future division of assets are not only for couples who intend to enter into a marriage. Those of are entering into a civil partnership can also make a pre-civil partnership agreement. A pre-civil partnership agreement holds the same legal status as a pre-nuptial agreement, in the manner described above.
It can sometimes be thought that, once a pre-nuptial or pre-civil partnership agreement has been finalised, it cannot be changed.
In fact, the matter of reviewing such agreements has been considered through caselaw and the Law Commission. In order to ensure that the agreement is relevant and meets the needs of the parties as far as is possible, a pre-nuptial or pre-civil partnership agreement should be reviewed in certain circumstances. If the agreement is no longer able to meet the needs of the two parties, it is not likely to be considered by the Court in the making of any financial order as it will not be deemed relevant.
A review should therefore generally take place after a significant life event or a certain passage of time. Examples of events which may trigger the need for a review are:
In view of the realistic possibility that the parties will need to review the agreement during the marriage or civil partnership, a 'review clause' should be included within the agreement. The review clause should make it clear that a review shall be permitted where appropriate and that this shall not impact the validity of the whole agreement.
When thinking about triggering events, it is also useful to remember that the marriage or civil partnership shall automatically revoke any will held by either or both parties unless this is explicitly made in contemplation of marriage or civil partnership. It is therefore sensible for both parties to consider making a will either prior to the ceremony, which explicitly states this is made in contemplation of marriage/civil partnership, or making a new will after the ceremony.
Another very common misconception surrounding pre-nuptial and pre-civil partnership agreements is that they are only for celebrities/the rich and famous.
Where one party has a significantly greater amount of assets than the other party (which is often the case for 'celebrity' couples), this can certainly be a compelling reason to make such agreement before a marriage or civil partnership. However, there are plenty of other circumstances which may make it appropriate for the parties to enter in a pre-nuptial or civil partnership agreement. Some examples are:
The agreement can cover different types of assets, such as:
It is commonly thought that the Court will simply consider all post-separation matters (including the arrangements for any relevant children) together in one set of court proceedings which are instigated. As far as children of the marriage or civil partnership are concerned, the Court will, in making a financial order, consider any such children in terms of their financial needs/the financial implications. However, arrangements for the children (such as which parent they shall live with, and the contact they shall have with the other parent) will be considered under separate proceedings where this cannot be agreed.
As a result, it is not usual to include the possible future living and contact arrangements within a pre-nuptial or pre-civil partnership agreement. It is however possible to include details regarding housing needs of the parties in reference to children (so as to ensure overnight staying contact with any children can take place), and the financial implications which may be relevant to the birth or adoption of any child during the marriage/civil partnership can be considered in a review (as detailed above).
The parties should, as far as is possible, reach a sensible and child-focused agreement relating to child arrangements upon separation. It is possible to formalise this in a separation agreement at a stage where separation is contemplated during the marriage or civil partnership.
When this is not possible, mediation should be attempted and thereafter, where no agreement is reached, court proceedings will generally be instigated. The Court's paramount consideration shall always be the welfare of the child concerned in any such proceedings.