Couples planning their wedding will be offered the chance to enter into pre-nuptial agreements beforehand, as part of new law reforms. The Law Commission has confirmed that the new rules, concerning how money and property should be divided after the breakdown of a marriage, are part of a wider plan to reduce the number of contested and acrimonious court proceedings. These reforms will mean that couples will be able to ring-fence inheritances, gifts or property that they brought into the marriage, from being shared in the event of a divorce. Pre-nuptial agreements are already commonplace in the United States, with many celebrities, such as Donald Trump, fully endorsing its use. Experts are predicting an increase in the demand for pre-nuptial agreements once the Law Commission’s proposals, which will include a draft bill, are published later on this month. As part of these proposals, the Law Commission is likely to put in place certain safeguards which will ensure that one spouse will not be left in financial need after divorce, but is also likely to recommend that maintenance available to spouses or civil partners be limited in time, in order to encourage financial independence. Peter Alison, Head of Family department at stevensdrake commented: “To enshrine pre-nuptial agreements in the law would lead to their being legally binding upon spouses and civil partners, which in the event of their divorce, would provide certainty in dividing their assets, thus minimising any acrimony and disruption caused to them and their children.” Unlike in the United States, pre-nuptial agreements are presently not legally enforceable in the UK.
However, in the landmark case of Radmacher in 2010, where a German heiress was allowed to retain her £100 million fortune, the Supreme Court did rule pre-nuptial agreements should be upheld, where parties had freely entered into them, and if it would not be considered unfair to hold them to them. Hana Khodabocus, Solicitor in the Family department at stevensdrake added: “It is important that parties thinking of entering into a pre-nuptial agreement each take independent legal advice in respect to its contents, and provide financial disclosure of their assets to each other. This will uphold the validity of the agreement in the event of the breakdown of the parties’ marriage or civil partnership.” If pre-nuptial agreements are to become legally binding under these reforms, new legislation will need to be passed, which is still possible before the next general election in 2015. Indeed, if this were to take place, agreements entered into now, could become legally enforceable upon enactment of new legislation.
At stevensdrake, our Family department can both prepare and advise on pre-nuptial agreements, providing clients with the peace of mind and financial security that they long for. For more information on this article, or to make an appointment regarding a pre-nuptial agreement, please contact Peter Alison on 01293 596935.