Before the Vows: A Guide to Prenuptial Agreement Law

The existence of a prenuptial agreement (more commonly known as a prenup) can divide opinion and starting the journey of married life with discussions of a prenup can often appear unromantic and cynical. However, having a prenup in place will reduce stress and anxiety during divorce proceedings as the agreement can be a vital resource to be relied on during financial negotiations.

A prenup is a written agreement between spouses, entered prior to marriage, which sets out in clear terms the division of assets in the event of a divorce and can effectively allow spouses to ring fence assets, protecting them from falling into the matrimonial pot to be divided upon separation.

The landmark case of Radmacher (formerly Granatino) v Granatino changed the approach to prenups in the UK; although still not legally binding it is now seen as totally inequitable to simply disregard a prenup and in most cases the courts tend to add significant weight to the terms of a prenup agreement unless there is an unfair element giving reason to veto the agreement.

To ensure your prenup would be considered in the event of divorce as a valid agreement, the following must be evident:

• Each party must have obtained independent legal advice and ensure that they are aware of the implications and potential financial consequences of the agreement.
• Neither party must have entered into the agreement under undue pressure or duress.
• Each party must understand the financial resources, income and liabilities that are involved. The parties must have disclosed their assets with open, honest and full disclosure occurring.

The court, however, retain the power to divert away from the terms of the prenup, should it be held that either party, or most importantly a child of the marriage, will face financial hardship should the prenup be strictly upheld. Despite the findings in Radmacher, the court will still consider other factors when deciding the final settlement outcome.

Can pre-nups be challenged?

A spouse can contest a prenup agreement but must be able to provide strong, legitimate reasons for doing so. A significant ground for contesting a prenup is that the terms are no longer fair to any children of the marriage or that one spouse was coerced into agreeing to the terms. If a spouse can show that the other had acted dishonestly in respect to their financial situation, they can seek to contest the agreement.

Essentially, a well written agreement is the best way to avoid any issues when seeking to rely on a prenup agreement. Heald family solicitors can offer advice and guide on how best to protect your assets and draft an agreement between you and your spouse that is clear and fair.