Prenuptial Agreements

... Doing things the American way

As the world becomes a smaller place and ever hungry paparazzi look for that juicy high profile divorce story we may all be forgiven for thinking that everyone who gets married in America has a prenuptial agreement. Far from it, but as the rich and famous of this world seem to protect their "pile" in the event of a marriage breakdown, sometimes prenuptial agreements are seen as the answer to their prayers.

So what is a prenuptial agreement? Well, if you assume marriage is a form of contract, not to be "entered into lightly or wantonly" in the words of the Church of England, a prenuptial agreement is entered into as a contract before you get married to determine who gets what assets in the event of a breakdown. Before unmarried couples rush off to instruct their solicitor to prepare a prenuptial agreement, just realise that the Courts in England and Wales do not recognise them as legally binding but, things are changing. The traditional view in England and Wales is as a matter of public policy, parties cannot by agreement house the jurisdiction of the Court or try to control what a Court might do in the event of divorce. Another objection is that a prenuptial agreement undermines the principles and institution of marriage by assuming from the outset that the marriage is going to breakdown. Remember, a marriage is for better for worse, richer or poorer. It is exactly this richer or poorer bit however that is forcing couples to look at prenuptial agreements. There have been a number of recent cases where the Courts are starting to recognise that a well drafted and fair prenuptial agreement may be a factor which a Judge can take into account on divorce.

One has to remember that the Courts have an obligation to take all factors into account so they are finding it difficult to ignore well drafted prenuptial agreements where it would be unjust to cast them aside simply out of historic prejudice. Remember that in the Scottish Law, there is the principle of pre-owned assets which in simplistic terms means that the parties take away the assets that they bought to the marriage and the joint matrimonial assets are split.

So, if you are about to get married, should you consider a prenuptial agreement? Well, you have nothing to lose really. You cannot be sure that a divorce Judge would take it into account but if it is well drafted, honest and fair, he may find that it would be inequitable if he did not at least look at it.

If you do consider a prenuptial agreement, remember, it must be fair so make sure that each one of you has your own legal independent advice, must not be done under duress. This does not mean that one party would hold a gun to the other but a prenuptial agreement written on the back of an envelope the day before the marriage is unlikely to be given a second glance. Honesty is the key so hidden assets which come to light will be given a short order by the Courts. Also remember that if you do decide to go down the prenuptial agreement route, remember that it may change over the lifetime of the marriage as the fortunes of the couple change and certain circumstances affect the marriage such as children, etc.

In my view as time goes on, prenuptial agreements will be given more emphasis by the Courts. Court time is extremely costly and the Courts are constantly looking at ways of saving Judge’s time, Court time and the disruption which Court cases cause to the parties. An enlightened Judge will be keen to give some weight to a prenuptial agreement if it saves time and money and therefore, prenuptial agreements are really here to stay.

Contacts

• Neil Anderton • neil.anderton@rblegal.co.uk • 01524 410424
• Sarah Carr • sarah.carr@rblegal.co.uk • 01524 39039
• Sara Fletcher • sara.fletcher@rblegal.co.uk • 01524 734884