A pre-nuptial agreement is a formal written agreement, entered into before the marriage of a couple, which sets out what will occur should their marriage be end in divorce. In the UK any couple contemplating marriage, or a same-sex couple considering a civil partnership under the Civil Partnership Act 2004 (UK), may enter into a pre-nuptial agreement.
An agreement which is entered into after marriage is not a pre-nuptial agreement but a post-nuptial agreement.
Enforceability
Until recently it has been the position of the UK courts not to have regard to pre-nuptial agreements when determining divorce settlements. Rather financial orders are made with regard to the matters outlined in section 25 of the Matrimonial Causes Act 1973 (UK) which first considers the welfare of any children from the relationship, followed by a long list of factors assessing the financial position of both parties. This has generally led to 50/50 rulings, leaving partners who entered a marriage with significantly more wealth than their partner financially damaged.
UK Courts have shifted from this position incrementally with the case of K v K [2003] being the first time a pre-nuptial agreement was upheld. Since then the court has upheld other agreements, however they are far from automatically enforceable. The general position of the courts can be summed up as not allowing pre-nuptial agreements to bring about an unfair result to divorce proceedings, thus it is important to have regard to the following factors when drafting.
It is apparent from cases including Crossley v Crossley that courts can find pre-nuptial agreements to be unfair if one party has not had access to independent legal advice, thus it is important both parties seek advice when drafting an agreement.
K v K identified a lack of full disclosure by one party of their assets as another factor courts will take into account when determining whether or not to give effect to an agreement’s provisions. It seems the best course of action is to attach a schedule to any agreement with a full list of both parties’ assets. However it must be noted that in Radamacher v Granatino [2009] the fact that there had not been full disclosure by the wife was not fatal and the pre-nuptial agreement was upheld. In terms of assets it is also important to note that UK courts will include overseas assets in their determination so it a good idea to include these in any agreement.
K v K also suggests that rushing into an agreement may be unfavourably viewed as amounting to duress, it is important to allow enough time for proper drafting and consideration of an agreement before a union in order to demonstrate an exercise of free will by both parties. If this requires postponing the date of the wedding then it may be worth considering so you are not confronted with non-enforcement in the case of a divorce.
Due to importance of getting a pre-nuptial right, and the fact that all individual cases will have different facts and circumstances to take into account, it is advisable to seek specialised legal advice when drafting a pre-nuptial agreement.
Children
A pre-nuptial agreement with provisions relating to children may come under particular scrutiny by courts as section 25 of the Matrimonial Causes Act 1973 (UK) has as its paramount concern the welfare of any children from a relationship who are still minors. Thus a pre-nuptial agreement which is inconsistent with the court’s determination of such welfare may not be considered when making a determination. The enforceability of a pre-nuptial agreement in relation to children will depend on how a court exercises its discretion.
If there are children or other dependants from any previous relationships it is also advisable to acknowledge this in any agreement and set out the interests of such children and how any future settlement might accommodate these interests. If this is not done the court may not have regard to any dependants other than those born of the marriage.
Varying an agreement
Pre-nuptial agreements can be varied by mutual agreement of both parties, just like any other contract. An agreement may also be varied upon the death of a partner under section 2(1)(f) of the Inheritance (Provision for Family and Dependants) Act 1975 (UK), if the court is satisfied that reasonable financial provision has not been made under the deceased’s will or other intestacy law.
In relation to enforceability the ability for parties to vary an agreement in the case of changed circumstance is something the court will look for when deciding whether or not to adopt the provisions of the agreement. In NG v KR [2008] Baron J found that a pre-nup’s failure to make provision for either party in the event of the birth of children made it unfair. Similarly Baron J found the lack of provision to make a financial settlement inconsistent with the agreement, even if there were genuine need arising from a change in either party’s circumstances (e.g. changes to income due to sickness, misfortune etc.), also made the agreement unfair.
In the UK a pre-nuptial agreement between parties getting married or partaking in a civil union has the potential to be upheld in UK courts. It is simply important to have regard to the factors which have been discussed when drafting your agreement, and it is extremely advisable to obtain legal advice. If drafted correctly though a pre-nuptial agreement could go a long way to having a divorce settlement determined in accordance with your and your partner’s intentions rather than simply the whim of the court.
De facto couples
Unlike in Australia there is no equivalent to the pre-nuptial agreement for couples who are not marrying or entering into a civil partnership.
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