The Power of Love Prenuptial Agreements

When planning for a wedding, entering into a prenuptial agreement is not usually the first thing on a couple’s to-do-list.

Whilst sometimes perceived as ‘unromantic’, awkward, or reserved for the rich and famous, prenuptial agreements have become increasingly popular in England and Wales amongst couples of various financial backgrounds to ensure financial security and avoid legal acrimony in the unfortunate event of separation.

So what exactly are they?

Prenuptial Agreements or “prenups” are legal agreements couples enter into prior to marriage or a civil partnership, to determine how their assets should be divided in the event of divorce or separation.  They can also be used to regulate financial affairs during the relationship – these are called Postnuptial Agreements or “postnups”.

Are they legally binding?

Unlike in many other jurisdictions, prenuptial agreements are not legally binding in England and Wales. However, this does not mean that there is no point in having one, as if they are properly entered into and certain conditions are met, they can still carry substantial weight in divorce proceedings.  More on this below.

Whilst the court will always have the final say (i.e. it is not possible for a prenup to override the jurisdiction of the court), in recent years, the court has increasingly shown a willingness to give more weight to prenuptial agreements in its rulings. It is therefore important to think carefully before you enter into a prenup as a court may bind you to its terms.

How much weight will the court give your prenuptial agreement in its decision making?

When considering how much weight to give to a prenuptial agreement, the key factor taken into account by the court is fairness. The landmark case of Radmacher v Granatino [2010] UKSC 42 outlined the three-stage test used by the court to assess this, which includes the pre-conditions that need to be met if the prenup is to carry substantial weight in their decision making. The test is as follows:

1. Was the agreement freely entered into?

To convince the court that the terms of your prenuptial agreement should be upheld and therefore significant weight should be given to it in their decision making, you must enter into your prenup of your own free will, without undue influence or external pressure. If there is any evidence of fraud, duress, misrepresentation, or one party exploiting a position of dominance to secure an unfair advantage, the prenuptial agreement may not have effect.

2. Did you and your partner have full appreciation of the implications of the agreement?

To be given weight by a court considering a prenuptial agreement, it is essential to show that you have fully understood the meaning and implications of the agreement.

Receiving independent legal advice and obtaining full and frank disclosure of respective financial positions prior to entering into the agreement, is the best means of ensuring that this aspect is met.

Further, it is best practice to enter into the agreement at least 28 days prior to wedding, as this gives you sufficient time to consider and negotiate the terms of the agreement.

Should you fail to enter into a prenuptial agreement before the marriage, you can still enter into a postnuptial agreement after the wedding day. In fact, there is no difference in the legal status of either nuptial agreement.

3. Would it be fair to hold you and your partner to the agreement in the circumstances prevailing?

The court generally provide that if it is fair to do so, they will choose to give weight to a nuptial agreement in order to respect a couple’s autonomy to decide how their financial affairs should be regulated, i.e. it would be “paternalistic and patronising”[1] not to.

When assessing what is fair, the court will have regard to “all the circumstances of the case”[2] and first and foremost consideration – in any case – will be the welfare of any children in the marriage/civil partnership. A Nuptial agreement, therefore, will be considered unfair if its terms prevent any of your children or future children’s needs from being met following your divorce[3].

Furthermore, should the agreement – at the time of separation – leave you or your partner in a “predicament of real need, while the other enjoys a sufficiency or more”[4], it would likely be found to be unfair.

We therefore encourage you to revisit your prenuptial agreement throughout the relationship to ensure that it remains appropriate (and to have a clause in the agreement to that effect). It is important to remember that the court looks at what meets you and your partner’s needs (and what is considered fair) at the time you seek to rely on your nuptial agreement, not when you enter into it.

Take Advice from SMB

If you are considering entering into, revisiting or amending your pre- or post- nuptial agreement, we strongly advise that you and your partner obtain independent legal advice. Doing so significantly increases the likelihood of a court giving such agreements significant weight, in the unfortunate event of a divorce.

If you are looking for advice on nuptial agreements, please do not hesitate to contact the Family Department at Simons Muirhead Burton LLP

[1] Paragraph 78 of the Radmacher v Granatino [2010] UKSC 42 judgment

[2] Section 25(1) of the Matrimonial Causes Act 1973

[3] Paragraph 77 of the Radmacher v Granatino [2010] UKSC 42 judgment

[4] Paragraph 81 of the Radmacher v Granatino [2010] UKSC 42 judgment