A Prenuptial agreement (also known as a prenup or prenupt) is an agreement entered into between parties before they marry which seeks to set out what will happen to the assets of one or both parties should they divorce.
They are, of course, not a romantic document. But they may be entered into by parties especially where one side has a significantly larger asset base than the other. They are often used by parties who have been through a divorce previously and who wish to avoid some of the pain if things go wrong again.
Do Prenuptial Agreements work?
Whilst not binding on the Courts of England and Wales, they have been described in higher Courts in a recent case as the "magnetic factor". They diminish in importance the longer the marriage subsists and in our view have a finite lifespan.
Whilst fairness and the needs of the parties dictate the Courts discretion, it has been noted the Judges do, if possible, like to hold people to the bargains they have made subject to certain contractual criteria having been met upon which we can advise you. These will include the time of the agreement (in the case of prenups not less than 21 days prior to the marriage and preferably not less than 4 weeks), the absence of duress, full and frank disclosure of financial matters and the opportunity to take independent legal advice.
The Courts have gone so far as to abbreviate normal procedures to accommodate a party seeking to rely on one of these agreements. This is helpful in reducing any extraction of unwarranted assets by the other party as nuisance value.
Whilst such agreements may not provide an immediate knockout blow, the Courts have shown they are prepared to reduce potential awards even if not holding the parties to the letter of the agreement.
Separation and Postnuptial Agreements
Postnuptial settlements are agreements reached by parties after marriage breakdown again made in an attempt to avoid battles at Court.
These can concern separating spouses, civil partners and cohabitants. They do not bind the Court from making a different decision to the division of assets that may have been agreed within the document. However, subject to certain criteria being met, such as full and frank disclosure of all the assets of the marriage/civil partnership/relationship, the benefit, or at least opportunity to take independent legal advice in the absence of fraud or mistake, the Court does like to hold people to their bargain.
The Court potentially exercises much greater discretion in relation to divorcing couples and couples dissolving their civil partnership but should one party seek to break the agreement, the Courts have shown themselves to be fairly robust. Whilst not necessarily holding a party to the terms of settlement, they have awarded less than would otherwise have been the case.
If you would like to make an appointment to discuss Prenuptial Agreements, please contact Lee Marston, lee.marston@clough-willis.co.uk or Marie Whittaker, marie.whittaker@clough-willis.co.uk.
