Pre & Post Nuptial Agreements
Unlike in parts of continental Europe Pre and Post Nuptial Agreements are not automatically enforceable in the English Courts. The basic maxim is that it is not possible for parties to “oust” the jurisdiction of the Courts to intervene and assist a party upon divorce.
However, the approval of the Courts to Pre and Post Nuptial Agreements is evolving and there have been some significant appeal court decisions concerning these and in particular Crossley v Crossley 2007, Macleod v Macleod 2008 and Radmacher v Granatino 2010. This article attempts to concisely set out the law in the light of the Radmacher decision.
A Pre Nuptial Agreement of course is one made in anticipation of marriage. A Post Nuptial Agreement is made during the marriage. The courts now treat each of these classes of agreement in the same way.
The existence of a Pre or Post Nuptial Agreement is now a circumstance which will be taken into account in determining how finances are to be organised on any subsequent divorce. In determining how much weight to give such agreements the court will take into account:-
- Was the agreement entered into voluntarily, with each party having full knowledge of the implications arising from the agreement and that the agreement was entered into without either party being placed under inappropriate pressure?
- Does the agreement make fair provision for the reasonable needs of any children? If it does not, the agreement is likely to be treated as un-enforceable.
- The agreement should make fair provision for each spouse. If the agreement conflicts with what a court might consider fair, the agreement may not be enforceable. In negotiating the terms of a Pre or Post Nuptial Agreement it is important therefore to consider what approach a court might take to division of assets on divorce. The agreement therefore needs to be carefully drafted to reflect for example the possibility of children or ill health. The agreement should also consider how on any subsequent marriage breakdown, each party’s reasonable needs will be met and further how any assets accumulated during the marriage will be shared.
- In an appropriate case (for example in Crossley v Crossley 2007 where the court described the Pre Nuptial Agreement as being of “magnetic importance”) there may be relatively little difficulty in showing that a Pre Nuptial Agreement should be upheld. In the Crossley case the marriage was short, there being no children and each party was independently wealthy.
- The court recommends that each party should have independent advice before the agreement is signed and further that they should be in full possession of enough information to make an informed decision to enter the agreement.
- Parties motives for entering a Pre Nuptial are often to protect property already owned or acquired by one party. The court concluded that there is nothing inherently unfair in this.
The field of Pre and Post Nuptial Agreements remains complex and fraught with uncertainty. The area is under review by the Law Commission and legislation may (possibly) follow.
In summary our view is that Pre Nuptial Agreements may assist in providing certainty for particular classes of individuals particularly:-
- Those of relative wealth
- Those with pre existing assets
- Childless marriages – perhaps people marrying for the “second time around”