You may have seen on Real Housewives of Cheshire this week that Hanna Miraftab and her husband-to-be are considering entering into a pre-nuptial agreement prior to their marriage. It is however a topic which is often misunderstood. People discuss entering into one generally and think that they know the legal implications of doing so, but actually there are a lot of misconceptions concerning pre-nuptial agreements that people may not be aware of.
For example, people generally think that if they enter into a pre-nuptial agreement and then the marriage breaks down, that the agreement will be legally binding. This is not actually the case. Either party could still make an application to court for a Financial Order (to determine how the matrimonial assets are divided) within later divorce proceedings. Pre-nuptial agreements are more commonly being upheld by courts upon marriage breakdown and are a factor that any court would consider when determining how to divide assets. The English court however always retains discretion to see what is fair when dividing those assets.
To provide the best chance of a pre-nuptial agreements being upheld in later court proceedings, there are numerous procedural safeguards which need to be adhered to and the agreement should be fair to the financially weaker party.
Guidelines have therefore been developed and such an agreement may carry little or no weight before an English Court if any of the following circumstances were found to apply:
- Where there is a child of the family born.
- Where the agreement is unenforceable i.e. it attempts to lay an obligation on a third party who has not agreed in advance.
- Where one or both of the couple did not receive independent legal advice before entering into the agreement.
- Where the court considers that the enforcement of the agreement would cause significant injustice (to one or both of the couple or any child).
- Where one or both of the couple have failed to give full financial disclosure of assets and income before the agreement was made.
- Where the agreement is signed very shortly before the wedding. Previously, the guidance suggested at least 21 days before but the Law Commission have since recommended at least 28 days before.
- Where there is evidence that one party was placed under undue pressure to sign the agreement (this may be linked with the timing of the signature and evidence about what legal advice was taken).
- Pre-nuptial agreements are also always subject to any future change in law.
There are of course cases where upon marriage breakdown, separating couples may decide to simply divide assets in accordance with the pre-nuptial agreement and without any dispute. However people are often not aware that to then make that division of assets legally binding, and prevent an individual making any further financial claims against their ex-spouse, a Consent Order should then be drafted to which the court must subsequently approve.
Pre-nuptial agreements are a complex area of law and it is vital that full legal advice is sought. If you are considering entering into a pre-nuptial agreement, at Maguire Family Law we are able to ensure that the agreement is drafted in accordance with the procedural guidelines outlined above and provide you with full advice as to your legal options.