Divorce reforms to give pre-nuptial agreements legal standing

The Law Commission is set to report to parliament in a move that could see pre-nuptial agreements become legally binding.

In a landmark case in 2010 the Supreme Court ruled that judges could take account of pre-nuptial agreements in considering divorce settlement cases. However UK courts have, in many cases, ignored pre-nuptial agreements and divided a couple’s assets on the merits of each case.

Currently, the courts are able to disregard a pre-nuptial agreement if certain conditions are not met. The conditions are:

• A pre-nuptial agreement must be entered into freely by both parties.  Neither party should feel they have been placed under pressure to sign the agreement. For this reason it is advisable for the pre-nuptial agreement to be signed at least 21 days before the parties marry.
• Both parties must fully understand the consequences of entering into the agreement. It is therefore crucial that both parties take their own independent legal advice on the terms of the agreement.
• The terms of the pre-nuptial agreement must be considered by the court to be fair. This means that the terms of the agreement must meet the financial needs of both parties and their children, where relevant.
• The parties should disclose their financial circumstances to each other prior to signing the agreement. A list setting out the parties’ assets (with valuations), income and debts should be attached to the agreement.

The Law Commission is now expected to recommend that, subject to safeguards to protect the vulnerable, pre-nuptial agreements will be enforceable. This would mean that couples would be able enter into a legally binding agreement setting out how their assets would be divided in the event of marriage breakdown, removing the need to fight out the terms of a divorce settlement.

If you would like to discuss this or any other family law matter, please contact Janine Hutson on 01772 258321, or at janine.hutson@harrison-drury.com