We have reported in more than one newsletter on the issues of prenuptial agreements.
A prenuptial agreement is one which is entered into by a couple prior to their marriage or civil partnership setting out how their assets are to be divided in the event that they divorce or dissolve the civil partnership. Such agreements are often entered into with the benefit of legal advice and can be updated as circumstances change over time.
At the moment, these agreements are not binding in English law. This means that the terms of the agreement will not automatically be followed in the event of divorce or dissolution. In what is described as a 'landmark' ruling in 2010, the Supreme Court held that a prenuptial agreement should be followed if it was entered into freely be the parties unless to do so would be unfair.
However, it is a topic that Parliament keeps returning to. In 2014 the Law Commission recommended that prenuptial agreements become enforceable and the Government said that it was considering this report in January 2017.
Another case has come to court to indirectly highlight the importance of entering into a prenuptial agreement.
The Court of Appeal recently considered the case of a divorcing couple whose total assets amounted to approximately £9.4m. The couple had been married for 23 years and many commentators would expect a largely equal split of the assets on divorce on the basis that the assets would have been amassed by both parties during the course of the marriage.
However, in the case in point, the Court was not persuaded by the argument and awarded the wife £3.5m. It is fair to observe that this is hardly an insignificant amount - but the point of interest is that the Court gave weight to the assets that the husband owned prior to the marriage and this is considered to be unusual given the length of the marriage.
The moral of this story is that many more couples will consider a prenuptial agreement prior to entering into marriage or a civil partnership. Such agreements are not just for the very wealthy. Arguably they are just as important for those with more modest assets. However, although prenuptial agreements are not legally binding, there are important timeframes and steps to take to ensure that the agreement is concluded properly.
Case: Hart v Hart [2017] EWCA Civ 1306
To discuss this or any other matrimonial related matter, contact us.