- AuthorBeth Woodward
The Law Commission has this week published its long awaited report in to whether the law should be changed to make nuptial agreements legally binding. It is proposed that the Court on divorce will be bound by the terms of a nuptial agreement unless the court needs to exercise its powers to meet the parties’ needs or the welfare of a child.
On divorce the Court can be invited to make a financial order dividing the marital assets between husband and wife and in some cases ordering that maintenance be paid. There are a number of factors the Court must consider when making a financial order but it is generally the case that the starting point is that matrimonial assets must be divided equally. This pre-supposes that the married couple have started off their married life on an even footing and through their joint efforts have raised a family and built up matrimonial assets together. However there are a growing number of people who come into a marriage on differing financial footings or who are getting married for a second time and want to ensure their children do not lose out if their second marriage does not work out. For example a young wife may own her house and be marrying someone with nothing to his name or an older husband and wife may want to agree that part of their wealth is preserved for their respective children and that neither will make a claim against specific assets in the event of a divorce.
A pre nuptial agreement allows both husband and wife to enter into a marriage with similar expectations of what will happen on divorce and knowing that if the worst comes to the worst they will be in more or less the same financial situation as they would have been if the marriage hadn’t taken place. Currently the Court is obliged to consider the existence of a pre-nuptial agreement but does have to be bound by it.
The draft Nuptial Agreement bill envisages that where a nuptial agreement is in force, where a husband or wife applies for financial provision the Court must not exercise its powers in a way that is inconsistent with the nuptial agreement unless it is doing so to meet the parties’ needs having regard to all the circumstances of the case to meet the interests of a child. The draft bill envisages six tests to see whether a nuptial agreement should be upheld by the Court which can be summarised as:
- Formation – it must be by deed which specifically states it is to have effect as a nuptial agreement wherever in the world it is executed.
- Timing – it must be made at least 28 days before the marriage.
- Disclosure – each must disclose their financial circumstances to the other.
- Advice – each party must receive legal advice.
- Validity – it must be independently valid as a contract under English Law and entered into without undue pressure from relatives or others.
- Variation – any later variation to a nuptial agreement must comply with all the above points.
A pre-nuptial agreement drawn up without the help of solicitors on the eve of the wedding for example will not stand up in court and therefore if you are contemplating a marriage and think that a pre-nuptial agreement might be for you, please contact Beth Woodward on firstname.lastname@example.org or on 01908 304 560 or any other members of the Family Department team at Neves on email@example.com