The law in England and Wales regarding pre and post-nuptial and civil partnership agreements has been in a state of flux for many years. Traditionally, pre-nuptial agreements were said to be void (and so ignored) on the grounds that they ran contrary to public policy. Because they contemplated a future separation/divorce they were said to undermine the institution of marriage.
However in recent years there have been a number of cases culminating in the English Supreme Court 2010 decision in the case of Radmacher v Granatino that have made these agreements increasingly important. The current state of the law can be summarised from the decision in Radmacher as follows:
1. The rule of public policy that pre-nuptial contracts are void because they anticipate a future separation is obsolete and should be swept away;
2. No distinction should be drawn between the legal treatment of pre-nuptial and post-nuptial agreements (an earlier decision of the privy council had suggested that post-nuptial agreements should be enforceable but pre-nuptial agreements should not);
3. Nuptial agreements still cannot exclude the jurisdiction of the court;
4. However, 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.
Although there was some discussion about what might render an agreement unfair this has effectively been left to the discretion of the court and so will be decided by judges on a case by case basis.
This may all be set to change. This morning (11th January 2011) the UK Government Law Commission published a consultation paper on what the Commission calls “Marital Property agreements”. The paper asks whether a couple should be able to enter into a binding agreement not to seek ancillary relief (financial relief) on divorce and, if so, whether the agreement should be able to encompass all of a couple’s property or to contain only terms relating to pre-acquired, gifted or inherited property. The consultation then goes on to suggest the sort of formalities that should be required if these agreements are to become binding. It suggests the following:
- The agreement should meet contractual requirements i.e. there must be an agreement to which both parties intend to be bound and each should get something from the bargain (this would also mean that neither party is under duress or undue influence);
- The agreement should be in writing and signed by the parties;
- There should be financial disclosure; and
- Each party should have legal advice prior to entering into the agreement;
The Law Commission have also said that nuptial agreements should not be enforceable to the extent that they fail to meet the needs of children of the family or either party would be put in a position of being reliant upon state benefits.
This is however a consultation and a final report is not expected until 2012. If you have a view and wish to respond to the consultation you must do so before 11 April. You will find a copy of the consultation together with an Executive Summary and the Law Commission press release at http://www.lawcom.gov.uk/marital_property.htm.
If you are interested in having a nuptial agreement then please contact us at firstname.lastname@example.org