15 November, 2010
The recent case in the press where a divorce settlement was reduced by more than £4 million pounds based on a prenuptial agreement is important as it was heard by our higher Courts and so sets a precedent for how these matters should be approached.
Since 1973, the law has provided a checklist of factors that a Court should take into account when dividing up assets in a divorce. Matters such as what resources each party has, what needs they have (e.g. to care for children or because of a disability), what earning capacity they have, duration of the marriage, their ages, conduct and their contributions all are factors that the Court routinely consider.
The Court is also concerned with achieving equality and fairness.
Over time, as society and our views on the permanency of relationships has changed, a growing number of people want to regulate the potential outcome if they were to divorce to create some certainty but also because people often enter into marriage with pre existing assets. It is from this that prenuptial agreements have arisen.
Prenuptial agreements are a Contract/Deed between a couple and set out how assets would be allocated should they ever get divorced. They are not binding upon the Court who remain bound to consider the law and the principles that underpin it. However, increasingly, the Court is taking these agreements into consideration and interpreting the law with reference to the agreement as it records the intentions of the parties. That is not to say the Court would see a carer of children excluded from being provided for.
It is important to know that only properly constituted agreements will be considered. There are "rules" that need to be complied with such as obtaining legal advice, the couple knowing fully about the other's financial circumstances and the agreement being entered into some time before the wedding. If not, it can affect the validity of the agreement.
Forbes Solicitors' team of Divorce Solicitors would always advise clients to enter into a prenuptial agreement. The worst case scenario is that the Court varies it but the best case scenario is that you have an outcome that you are happy with.