Is the prenup in the UK finally catching on? – words Alexa Wang

Pre-nuptial agreements have been filtering into the national collective consciousness for some years now. In recent years, they have achieved greater prominence due to several high-profile court decisions.

As more couples understand how to make a prenup (their colloquial name) work for them, many firms of solicitors have seen an upsurge in enquiries. It seems like the prenup in the UK is catching on.

 

Prenups: a Brief History

Prenups are not a new device. Their recorded history dates back as far as ancient Egypt – and the Ketubah, a Hebrew pre-marriage contract, is thought to be almost as venerable. They were also used extensively in medieval England, although negotiations were conducted by the families of the couple rather than the couple themselves. However, for a long period of history in England and Wales, prenups were of little benefit due to the inability of a married woman to hold property in her own right. Matters started to change with the coming into force of the Married Women’s Property Act 1882.

Prenups In Modern-Day England And Wales

The aim of any prenup entered into today is much the same as ever: a pre-marriage determination of how the assets held by a couple will be distributed in the event of a divorce. Crucially, however, they have been recognised as legally enforceable since the 2010 landmark decision of the Supreme Court in Radmacher v Granatino,  Although, by carefully reserving an element of judicial decision, the ruling stopped short of stating that prenups are binding, the inference was clear: a prenup that is not unfair on either party is likely to be upheld. With around 42% of marriages currently ending in divorce, the potential implications of this are significant.

The latest case law demonstrates that the trend towards recognising prenups is continuing. For example, in the 2015 case of WW v HW, the High Court afforded significant weight to a prenup even though it did not provide for one party’s needs. That party had received comprehensive legal advice prior to signing the prenup and, in addition, had not been candid with their disclosure of their own assets.

In the earlier ruling of BN v MA, it is clear that what constitutes a party’s real needs is interpreted at a low level (“that minimum account required to keep a spouse free from destitution”, per Mostyn J). However, the court also recognised that it was not fair for a prenup to prejudice the rights of any child of the family – and this remains a crucial point today. There are always going to be arguments for and against prenuptial agreements. It is the presence of children that is most likely to upset a prenup.

Prenups: Safeguards

It is almost impossible to predict the future financial position of a couple with complete certainty. Consequently, it is essential that both parties understand what they are agreeing to. Both individuals must seek their own independent legal advice, and the legal advisors or prenuptial agreement solicitors involved must confirm that those parties are entering into the agreement of their own free will. A legal advisor must be mindful of their duty to ensure their client understands the potential implications of marrying with and without a prenup. The parties themselves must disclose all of their assets, whether they are held in the UK or abroad.

Prenups: The Future

Although there have been calls to make prenups binding, this has not yet happened and judicial scrutiny remains an essential part of the process. This is of benefit both to the parties to a prenup and to their lawyers because it makes very clear that there is a need for careful, accurate and rigorous drafting. In turn, this means that drawing up prenups is a necessarily labour-intensive process, which does not always sit well within a fixed fee arrangement. However, a client who understand what is potentially at stake – his or her long-term financial future – is less likely to want to cut corners on the legal advice necessary to achieve a satisfactory prenuptial agreement.

 Is the prenup in the UK finally catching on? – words Alexa Wang

This article was supplied by Clifford Johnston and Co – contact today for advice on Pre-nuptial agreements.

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