Nuptial Agreements: Are they worth it?

First, what do we mean by a Nuptial Agreement?

The term includes Pre-nuptial (or Pre-marital) Agreements (aka “Pre-nups”), Post-nuptial Agreements and the civil partnership equivalents.  These are written legal Agreements between parties to a marriage or civil partnership, entered into either before or after the ceremony, typically setting out how a couple wish their assets to be dealt with if they later separate or divorce.  They aim to provide clarity, certainty and protection with a view to limiting the scope for future dispute leading to expensive court proceedings.

Are Nuptial Agreements binding?

Not absolutely but provided they are done properly, they stand a good chance of being upheld.  In England and Wales, case law has established that courts “should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement”.  This was the Supreme Court’s assessment back in 2010 in the landmark case of Radmacher v Granatino, and it remains applicable now.  We tell our clients that they should expect to be held to a properly drafted Nuptial Agreement and that even if it is not later upheld to the letter, it will almost certainly influence the outcome on divorce.

How can I ensure my Nuptial Agreement will be upheld?

It is very important to follow certain requirements necessary to establish a legal contract and to comply with the courts’ perception of fairness.  The basic recommendations are:

1. The Agreement needs to be in the form of a “deed” with the parties stating clearly their intention to create a legal connection.

2. The couple should have an awareness of each other’s financial and other relevant circumstances, which we usually set out in a schedule to the document, to ensure sufficient disclosure and an appreciation of what signing up to the Agreement means.

3. Both parties must have received independent legal advice.  We like to include with our Nuptial Agreements certificates signed by both advisors to that effect.

4. A Pre-nuptial Agreement should ideally be signed not less than 28 days before the marriage or civil partnership ceremony.  It is not recommended to enter into a Pre-nup at the last minute.  Rather, a couple should look at a Post-nuptial Agreement if they have left it too late.

5. There should be no undue influence or duress.

6. Provision should be broadly fair.  This does not mean that it needs to be equal, or generous, or what the judge would have done, but it has to ensure that any child of the family is properly provided for, the weaker party is not left in a state of real need, and that certain key events, such as the loss of employment or long-term illness, are considered.  We make provision for regular reviews to ensure that our Agreements remain appropriate as the years go by.

Why might a Nuptial Agreement be right for me?

One of the recurring features of Nuptial Agreements is the need to establish, and to an extent ring fence, what is non-matrimonial property, as distinct from matrimonial property which may be shared.  Anyone is free to enter into a Nuptial Agreement, they are not just for the rich and famous, but here are some of the top reasons why people want a Pre- (or Post-) Nuptial Agreement:

• One party has inherited wealth, trust assets or an interest in a family business which they want to ring fence from future claims.

• One party has acquired real estate or developed a successful business which they want to protect, in some instances preventing disruption to family members or business partners.

• One or both parties have been married before, especially where there are children from a previous relationship to provide for.

• Conversely, a party may have significant debt such that the other party needs to be protected.

What if I or my partner have an international connection?

There are many special considerations for cases involving foreign jurisdictions which are too complex for the scope of this note.  The bottom line though is that a couple should take legal advice not only from a lawyer in England and Wales, but also in the other relevant country or countries.  This helps to demonstrate the overall fairness of the Agreement as well as ensuring that the parties understand to what extent the Agreement may be upheld should they divorce elsewhere.  We sometimes advise that a “mirror agreement” should be prepared in the other relevant jurisdiction.

It is worth noting that the English courts have upheld or given weight to numerous foreign Agreements, even where they haven’t complied with the requirements listed above but are standard procedure in the other country.  It all depends on the facts of the case, and that is why specialist family law advice should be obtained.

Whilst Nuptial Agreements are not romantic and can be difficult to address as they focus on the potential failure of the relationship, the discussions necessary to create the Agreement encourage communication and can promote a healthy relationship as a party’s concerns are thereby allayed.

If you are thinking about entering into a Nuptial Agreement, or you may be contemplating a divorce where a Nuptial Agreement is a feature, we at Tanners have considerable experience of both drafting and advising on Nuptial Agreements and would be happy to provide you with guidance.  Please contact either David Milburn or Meg Moss you wish to discuss a potential Pre- or Post-Nuptial Agreement.