When entering into a new relationship there are protective measures potential cohabitees and spouses can take to safeguard their assets. Our next newsletter will look at ‘Living Together Agreements’ and appropriate advice for those looking to live together but not enter into marriage. So when entering into marriage what can you do to safeguard your existing assets? It's generally understood that prenuptial agreements are not binding at English law but that does not mean to say they will be an important factor to be taken into account should the marriage break down. These kind of agreements are relatively new and have been strengthened by the recent and widely publicised case of Radmacher v Radmacher which established the following:-
"The court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement."
This ruling is a good summary of the current law. Prenuptial agreements, if they are to be acceptable evidence to the court, must be entered into with careful consideration. The final judgment in the Radmacher case gave prenuptial agreements "decisive weight" yet the family courts continue to leave enough room to exercise their discretion so as to achieve fairness.
In the subsequent case of Z v Z the courtrs departed from the original prenuptial agreement. However, this was after 14 years of marriage, 3 children and significantly changed circumstances. It is therefore sensible to periodically review any agreement upon life changing events such as a child being born or a significant change to the financial position of the parties.
In reality the court will use their judicial discretion when faced with a disputed prenuptial agreement taking into account all the circumstances. However, there are certain criteria that must be met:-
Did the parties enter into the agreement of their own will, with a full understanding of its terms and the opportunity of taking legal advice?
Was the agreement signed at least 21 days before the marriage?
Did the parties fully disclose their financial positions to each other prior to the agreement being signed?
Are the terms of the agreement fair in that the basic needs of the parties would be met upon its application?
While often regarded as terribly unromantic, the reality is that such agreements are a sensible and practical way of dealing with one’s pre-acquired assets should the marriage break down. If you would like some further advice on this ever evolving area of law please do not hesitate to contact Helen Cankett or Jemma Jones in the family team.
These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.