The Telegraph reported this month that Family Law firms have seen “a surge of interest” in pre-nuptial agreements since the publication of the Law Commission’s report on Matrimonial Property, Needs and Agreements published on 27th February 2014, which recommended the enforceability of pre-nuptial agreements.
Currently, pre-nuptial agreements are not automatically binding in England and Wales as they are under the legal systems of many other countries. However, following the landmark Supreme Court of Radmacher – v – Granatino in 2011, the Courts are now increasingly willing to take properly drawn up pre-nuptial agreements into account in determining how matrimonial assets should be divided upon divorce. In this case, the Court gave decisive weight to a pre-nuptial agreement stating “The Court 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”.
Upon divorce, Courts have a wide discretion to redistribute the parties’ assets regardless of in whose name they are, taking into account many factors. Those seeking to preserve assets built up prior to a marriage should consider having a pre-nuptial agreement drawn up, including where one party has built up business assets, inherited family assets, or upon second or subsequent marriages where it is important to make future financial provision for children from a previous relationship.
The pre-nuptial agreement should be entered into in good time before a wedding, at least 28 days, there should be full financial disclosure between the parties and both parties should seek independent legal advice. The Law Commission’s report recommends that as long as such procedural safeguards are in place, pre-nuptial agreements should be binding.
Certainly public awareness and interest in pre-nuptial agreements is increasing. We await with interest the government’s final response to the Law Commission’s recommendation.