Pre-nuptial agreements are contracts made between couples who are ‘soon to be married’, that deal with the division of assets if they should later decide to divorce. By ring-fencing certain assets, couples can feel safe in the knowledge that in any financial settlement, their most valuable assets will be excluded from any potential settlement.
Or can they?
Pre-nups are widely used in the USA and other countries with great success but in England and Wales, they are yet to be made binding. There has been a call for reform for many years to change this. Following a four-year consultation process, the Law Commission is soon to publish proposals to make Pre-nups legally enforceable in England and Wales.
Despite the fact that pre-nups are currently not legally binding, judges do take into consideration the contents of such agreements and the parties’ circumstances when considering a financial award. Consequently, the popularity of pre-nups has been rising over recent years and this trend is looking to continue going forward.
It is important to consider the content and wording of any agreement entered into between couples. Recently, the ex-wife of a Swedish property tycoon has returned to court seeking a larger financial award than was provided for in her pre-nup. She argues that she had not truly understood the implications of the agreement and the fact that it was written in obscure language. The Court of Appeal has yet to decide this case, so watch this space.
Over the next few years, pre-nups may become increasingly common place in financial discussions following divorce. If you decide to enter into such an agreement, it is essential that you obtain specialist legal advice as soon as possible.
If you need advice on preparing a pre-nuptial agreement or any financial matters following a relationship breakdown, please contact us. We have offices in Exeter and Plymouth, and appointments are also available in Taunton.