Q. Are Prenuptial Agreements legally binding?
A. Prenuptial Agreements are not legally binding in England and Wales. The position in Scotland (which has a different legal system) is different; in Scotland prenuptial agreements are generally regarded as being legally enforceable. In England and Wales, the Court will take account of a prenuptial agreement as one of the circumstances of the case and give appropriate weight to the agreement, depending on all the circumstances. The starting point is that the agreement will be upheld so long as it was freely entered into by both parties with full understanding of its implications, unless it would be unfair to hold the parties to the terms of the agreement. This means that the agreement is likely to be upheld but not so as to constrain the economically weaker partner below that partner’s financial needs, or right to be compensated for any financial disadvantage generated by the way the couple conducted their marriage.
Q. Is there anything I can do to increase the chances of a Court upholding the terms of my prenuptial agreement in the event of a divorce?
A. This is where we come in. Our role is to advise you how to increase the likelihood of your prenuptial agreement being upheld. This will include both of you having separate independent legal advice, exchanging information about your financial positions and ensuring that the agreement is negotiated and concluded in your good time before the date of the wedding. This will usually mean signing up to it not less than 28 days before the wedding.
Q. Is there any difference between the treatment between prenuptial and postnuptial agreements in England and Wales?
A. There is no legal difference between the treatment of prenuptial and postnuptial agreements. The process of negotiating a pre and postnup is exactly the same. You may be advised to have both a prenup and postnuptial agreement, for example, where you have left it close to the date of the wedding to sort out a prenup. Alternatively, you may be advised to start the negotiations and sign up to the agreement after your wedding, rather than rushing to conclude the prenup without sufficient time for consideration and reflection, which could make it less likely that the agreement will be upheld if the marriage broke down.
Q. How much does a prenup cost?
A. The cost will depend on the extent of the negotiations between you, your partner and your respective lawyers (how far you agree or disagree about what the terms of the agreement should be) and the complexity of the asset base. Other factors that may affect the costs include the need to involve foreign lawyers where, for example, you are planning to move to another jurisdiction. We offer initial free advice by telephone or e-mail and if you decide to take the matter further we always provide a written costs estimate following our initial meeting with you. In this way you are made fully aware of what your costs are going to be. In any event, the costs of having prenuptial agreement are likely to be a lot less than the legal costs you might incur for a contested financial application if you get divorced, without having a prenup. In all cases we provide initial free advice by telephone or e-mail, without any commitment on your part to instruct us.
Q. Who pays the costs of a prenuptial agreement?
A. This is a matter for negotiation between the couple, both of whom will need to take separate independent legal advice from solicitors of their choice. It is important that both parties instruct lawyers who have experience in dealing with Prenuptial Agreements, as they are still relatively unusual in our jurisdiction. Where one of the partners is economically stronger than the other, it is usual for the economically stronger partner to pay the costs of both parties.
Q. How do I raise the subject of having a prenup with my fiancé(e)?
A. We understand that having to think about what should happen if your marriage were to break down at a time when you are making your wedding plans and looking forward to your future together as a couple, can be very awkward and uncomfortable. We can help with this by making practical suggestions about how to approach the discussions you will need to have with your partner. This can include having therapeutic support, alongside the legal process of negotiating the terms of your Prenuptial Agreement.
Q. How does family law in relation to Prenuptial Agreements in England and Wales differ from other countries?
A. In many other countries (e.g. Australia and most states in the USA) Prenuptial Agreements are legally enforceable. They are also enforceable in most other European countries, which have civil law jurisdictions. In such civil law countries they have the concept of a marital property regime, either imposed on or chosen by the parties. In those civil law countries the function of a Marital Agreement is to choose a marital property regime (usually separation of property) and/or to contract out of the regime which would otherwise be imposed on the couple (usually community of property). However, in English law, we do not have the concept of a marital property regime. The function of a prenuptial agreement in England and Wales is to provide a more certain outcome to the financial aspects of a divorce, rather than the uncertainty of an outcome based on the Court’s discretionary jurisdiction to deal with the financial aspects of the divorce. The law in England and Wales could change if the government follows recommendations made by the Law Commission in February 2014 that legislation should be introduced to enable couples to make legally binding prenuptial and postnuptial agreements (‘Qualifying Marital Agreements’), subject to certain conditions.
Q. What will happen if we get divorced if we do not have a Prenup Agreement?
A. The Court will determine the outcome of the financial aspects of your divorce, unless you are able to reach agreement between yourselves as to what should happen. After a long marriage which has produced substantial wealth it will be usual to divide the assets of the marriage equally, whether or not the economically weaker partner has made any financial contribution to the marriage. This is because the contributions of the homemaker/carer spouse are regarded as of equal value to welfare of the family as the contributions of the moneymaking spouse. If you do not want this to happen, you would have to try to persuade the court that it would be unfair to divide the assets equally.
Q. If Prenuptial Agreements are not legally enforceable, does it matter if I sign one? I am the economically weaker partner.
A. You should only sign a prenuptial agreement if you are prepared to accept the financial provision that is set out in the agreement. Although the Court might not uphold the agreement, in the event of a breakdown of the marriage, there will be a presumption that you intended to be bound by it and that it should be upheld. Moreover, the law could change, as The Law Commission has recommended that Prenuptial Agreements should become legal enforceable in the future, although any change in the law is unlikely to apply retrospectively to your Agreement.
Q. Is there any advantage to me as the economically weaker partner in entering into a Prenuptial Agreement? My partner has told me that he is not prepared to get married without a Prenuptial Agreement.
A. See the answer to the question above. The purpose of getting a Prenuptial Agreement from the point of view of your partner will be to protect his wealth by avoiding or reducing the impact of the court’s discretionary jurisdiction in the event of the breakdown of the marriage. However there will be some advantage to you in that the financial outcome as set out in the Prenuptial Agreement will be more certain and you will know in advance what to expect in that unhappy event. Moreover, although you will almost certainly be worse off in the unhappy event of a divorce after having signed a Prenuptial Agreement than you would be without one, you will be in a very vulnerable legal position in the event that you continue to cohabit with your wealthier partner rather than getting married. This is because, in this jurisdiction, there is no legal status of being a “common law wife”, contrary to common belief and the legal rights of a cohabitee in the event of the breakdown of a living-together relationship are very limited indeed.