As a Specialist Family Lawyer, I am frequently asked whether there is “any point” in entering into a Prenuptial Agreement. “Do they stick?” The question is often put to me by a Family’s Accountant or Commercial Advisors as a tax planning exercise is embarked upon. Mum and Dad, as head of a family, may be wanting to pass on wealth to their children or grandchildren. That wealth might be cash, property — a house, commercial premises or land — or it might be shares in a family business. The older members of the family have worked hard to build up that wealth or it may be an asset passed down from generation to generation — a farm or an asset in a Family Trust.
The concern is always that that asset might be threatened or, even lost completely if the younger generation with the benefit of that asset were to embark on a marriage which then involves an acrimonious divorce.
How to Protect that Asset?
The law relevant to Prenuptial Agreements in England and Wales has changed quite dramatically since the high profile case of Radmacher -v- Granatino – a case which involved our highest Court, the Supreme Court, in 2010. Their Lordships concluded that a well drafted Prenuptial Agreement should carry considerable weight before a Divorce Court and commented that we lagged behind most European Countries and various States in America where such an Agreement would be automatically recognised.
We are still left however with the basic start point that a Prenuptial Agreement is not contractually binding and this must be the start point of any advice given. However, what a sea change there has been since 2010!
The Law Commission published a report in 2014. The report ran into 221 pages as a detailed summary of how Family Law had developed on ‘marital property, needs and agreement’. The Law Commission endorsed Marital Agreements and recommended that there be a change in the law with an Act of Parliament which would allow Agreements to be considered binding.
Clearly, Acts of Parliament at this stage in the political calendar, are unlikely to deal with Prenups as their first priority. Post Brexit vote, the Government has bigger things to worry about, nevertheless, it is helpful to highlight prerequisites that must be followed if such an Agreement is to carry weight before a Divorce Court. Weight is certainly something that they punch and the Judges have been keen to point out that, provided prerequisites are followed, they would be very slow to interfere with such a well drafted Prenuptial Agreement and likely to follow it.
The prerequisites are:-
This is a technical area but, in answer to the initial question poised, most certainly it is worth considering and can provide certainty for a couple and their extended family and is most definitely the Modern Way as parties marry later or there is an imbalance of wealth.
As an experienced Family Law Solicitor with over 26 years specialising in Family Law, Elizabeth Hassall has been involved in a number of prenuptial instructions involving complex assets and delicate negotiations.
Contact Elizabeth Hassall, Helen Davies or Chelsey Bayliss, the experienced Family Law Team at Jolliffe & Co LLP on 01244 310022. All three members of the Family Team are members of Resolution, Elizabeth and Helen are accredited members. Elizabeth is recognised as a Leader in the field of Law by both prestigious Directories, Chambers and the Legal 500.‹ Back to articles