A prenuptial agreement is an agreement made by a couple before marriage or entering into a civil partnership. This agreement sets out how the couple want their assets to be divided, in the event that they should divorce or have their civil partnership dissolved.
It should be noted that prenuptial agreements are only one type of marital property agreement. Others include:
- Postnuptial agreements (made after a marriage or civil partnership).
- Separation agreements (made after separation and in anticipation of an imminent divorce or dissolution).
- The current status of prenuptial agreements (Radmacher v Granatino)
Previously prenuptial agreements were unenforceable because it was considered that they undermined the institution of marriage and attempted to fetter the discretion of the courts. However, in the landmark case of Radmacher v Granatino in 2010, where the Supreme Court held by a majority of eight to one that the courts should give effect to a prenuptial agreement where it had been freely entered into by each party, and where the parties fully understood its implications, unless it would not be fair to hold to the parties their agreement.
Since Radmacher v Grantino, the courts have become willing to attach weight to some prenuptial agreements. The Supreme Court has ruled that both pre and postnuptial agreements have “magnetic importance” and spouses should be bound by them unless it can be shown that they are unfair in either how they were created or the effect they would have.
There still remains a degree of uncertainty as to whether a court would make an order which reflects the terms of a prenuptial agreement. Radmacher v Granatino has emphasised that the enforceability of a prenuptial agreement will depend on the court’s view of its fairness and since the Supreme Court decision, weight has been given to some agreements but not to others.
Subsequent case law has indicated that a prenuptial agreement cannot be allowed to prejudice the reasonable requirements of any children and that the longer the marriage has lasted, the more likely the agreement will be considered to be unfair. Furthermore, where a party is unable to meet their needs, fairness may require a departure from the agreement.
Baroness Deech has called this:
“the worst of both worlds…Judges have said that pre-nups can be binding, but they have applied so many conditions to their validity that couples now spend hundreds of thousands of pounds litigating over whether the pre-nup is binding, which defeats the purpose.”
The Law Commission project was set up to try and resolve some of the uncertainty regarding the status of prenuptial, postnuptial and separation agreements. In 2014, the Commission proposed that with some conditions, couples should be able to enter into binding agreements which would not be subject to the court’s assessment of fairness. Certain requirements would have to be met in order for the agreement to be a “qualifying nuptial agreement”, including:
- The agreement must be contractually valid;
- The agreement must be made by deed and must contain a statement of understanding signed by both parties;
- The agreement must not have been made within 28 days immediately before the wedding or civil partnership;
- Both parties to the agreement must have received disclosure of material information about the other party’s financial situation;
- Both parties must have received legal advice at the time the agreement was formed.
The future of prenuptial agreements
The Government is considering the Law Commission’s recommendation on qualifying nuptial agreements and in January 2017 they confirmed that they will respond in due course in the context of their wider plans for family law and system reform.
Although further guidance is awaited from the government, prenuptial agreements clearly have and will continue to have an important status in matrimonial law. Provided that a prenuptial agreement can be demonstrated as fair, it is very likely to be binding.