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Nuptial agreements - Are they binding, and are they facing a changing landscape?

Nuptial agreements encompasses pre nups and post nups. A pre nup is made in anticipation of a marriage, whereas a post nup, also known as a post marital agreement, is made after a wedding or ceremony. Both documents have the same legal standing.

Before the landmark case of Radmacher in 2010, the law around nuptial agreements was a grey area. Radmacher examined the extent to which nuptial agreements were binding, and how much weight they should be given as a pre-requisite element of a divorce and finances case.

As such, Radmacher set out a three stage test to determine how much weight a nuptial agreement should have, with the overarching principle of achieving fairness.

• The agreement must be freely entered into, without undue influence or external pressure. The parties age and emotional state of mind at the time the agreement was entered into will be considered.
• Parties much have full appreciation of the implications of the agreement. Whilst parties do not have to exchange financial disclosure before the agreement, a lack of financial understanding of the other party may mean the court could depart from the agreement. Independent legal advice is always strongly recommended before entering into these agreements.
• It must be fair to hold the parties to the agreement in the current circumstances. It is obviously not fair to prejudice the requirements of a child, however, the autonomy of the parties will be considered, but the court will not adopt a "court knows best" stance unless absolutely necessary.

One important point to note is that parties cannot seek to override the jurisdiction of the court by entering into a nuptial agreement in the hope that all financial remedy proceedings will be instantly dismissed.

The court will also consider the below factors when determining the weight of a nuptial agreement:

• Needs: each party must have reasonable provision made for them, their housing, and financial needs.
• Compensation: only once the needs of the parties have been considered, the court should look at whether one party has more than the other due to one party for example being a primary carer for the children and having put their career on hold for this. This may require the other party to compensate that party for their loss of career development.
• Sharing: marriage is about being a partnership and being equal, and the courts will only depart from equality if there is good reason to.

So, does this mean nuptial agreements are always binding?

No, not always, the key test is the three-stage test above. Radmacher introduced a presumption that if an agreement is freely entered into with full appreciation of its implications, the court will consider an agreement unless there are circumstances which would render it unfair.

Children of the parties, that were not anticipated or considered at the time the agreement was entered into, or similarly an unexpected disability or illness that was not in the contemplation of the parties at the time, will most likely cause the court to depart from the nuptial agreement.

The considerations above are clearly subjective considerations, which the courts will use their discretion to determine whether they should increase or decrease the weight given to a nuptial agreement.

What is clear though, is that if the nuptial agreement represents circumstances that still hold true today, the court may uphold a nuptial agreement.

Is there a move towards legislating on nuptial agreements?

In 2014, the Law Commission reported on Matrimonial Property, Needs and Agreements. The report considers the current position of nuptial agreements and advises on a new legal landscape for binding nuptial agreements. The Law Commission also included a draft bill for Parliament to consider: The Nuptial Agreements Bill. The bill states that the court will have limiting powers to depart from a "qualifying nuptial agreement", unless it is to meet the parties needs, or in the interests of a child. On the face of it, this doesn't seem to detract much from the current position under Radmacher. However, the Law Commission sets out further strict guidance on qualifying nuptial agreements stating it will be a binding contract that takes place upon divorce, it must be executed as a deed, (it will need witness signatures and must be in writing), it cannot be made within 28 days of the marriage, there must have been financial disclosure, and both parties must have received legal advice ahead of the agreement.

Evidently though, Parliament has not yet decided to legislate in this area. However, after the implementation of new divorce law in April 2022, some rumblings about legislation for similar legal protection for cohabiting couples, and the Law Commission draft bill, it is not out of the question that in the future we may see a changing landscape for the legal status of nuptial agreements.

For assistance and advice on drafting a nuptial agreement, please contact the family team at Forbes Solicitors

For more information contact Annabel Stainer in our Family/Divorce department via email or phone on 0333 207 1130. Alternatively send any question through to Forbes Solicitors via our online Contact Form.

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