Prenuptial Agreements

Lovell Chohan Solicitors have Family Law, Family Law advanced and Resolution accredited specialist family lawyers who can advise and assist you on all aspects of prenuptial agreements.

When a Court grants a decree of divorce, nullity of marriage or judicial separation it has the power to make ancillary relief orders. The general position over the years has been that when a court is considering the grant of ancillary relief is not obliged to give effect to nuptial agreements. The position had remained that the parties could not by agreement oust the jurisdiction of the Court. The Court must however give appropriate weight to such an agreement.

Historically, the Courts attitude towards pre-nuptial agreements was that they were ‘contrary to public policy’.

Developments over the years have eroded this principle. In NA-v-NA [2006] Baron J stated ‘It is an accepted fact that an agreement entered into between husband and wife does not oust the jurisdiction of this Court. For many years agreements between spouses were considered void for public policy reasons, but this is no longer the case’. It therefore follows that the Courts are now able to look at prenups more favorably.S25 (2)(g) requires the Court ‘to consider all the circumstances of the case and or the conduct of the parties’.

In NA-v- NA a prenup was not upheld on the grounds of undue influence by the husband.

In M-v-M it was held:

  • The court’s overriding duty under S25 MCA was to attempt to arrive at a fair solution in all the circumstances.
  • First consideration was the child’s welfare
  • Section 25(1) MCA required the Court to have regard to all the circumstances in the case and to the considerations in S25(2).The prenup was either a general circumstance of the case or amounted to conduct under S25(2)(g).Therefore, the court’s duty was to look at the agreement and decide in all the circumstances of the case what weight should in justice be given to it. It would have been as unjust to the husband to ignore the prenup’s existence and terms as it would have been to the wife to hold her to it. The relevance of the agreement was tending to guide the court to a more modest award than might have been made without it, but it could not dictate the wife’s entitlement. It was agreed that this was not a case for equal division of assets. The family wealth had been created by the husband whilst the wife’s major contribution was the care of the child.

  In K-v-K The Court held:

  • The wife had received legal advice, understood the terms of the prenup, was properly advised as to its terms and willingly signed it without pressure
  • Whilst there had not been proper disclosure by the husband he had not exploited his dominant financial position. Both parties entered into the prenup knowing the wife was pregnant. There were no unforeseen circumstances arising since the prenup which would make it unjust to hold the parties to it.
  • The wife was to receive £120,000 capital in accordance with the prenup.
  • In relation to periodical payments the court held that it would be fair to expect the husband to pay PPS to enable the wife to move and comfortably bring up their child.
  • The court also held that a child of parents between whom there was a great disparity of wealth was entitled to be brought up in circumstances which bore some kind of relationship to the current resources and standard of living of the wealthy parent. The length of the marriage was irrelevant in this context.

In J-v-J [2004] It was held that a prenup settlement signed by the parties was of no significance in the case. Quite apart from the obvious unfairness of its terms, it had been signed on the very eve of the marriage, without full legal advice, without proper disclosure and had made no allowance for the arrival of children.

In Crossley –v- Crossley [2007] – Held: ‘All these cases are fact dependent and this is a quite exceptional case on its facts, but if ever there is to be a paradigm case in which the court will look to the prenuptial agreement as not simply one of the peripheral facts in the case but as a factor of magnetic importance, it seems to me that this is just such a case…’

In 1998 the Home Office published a consultation document and it was proposed that any such agreements should be subject to six safeguards. In essence these agreements would not be legally binding:

  • Where there is a child of the family, whether or not that child was alive or a child of the family at the time the agreement was made.
  • Where under the general law of contract the agreement is unenforceable, including if the contract attempted to lay an obligation on a third party who had not agreed in advance.
  • Where one or both of the couple did not receive independent legal advice before entering into the agreement.
  • Where the Court considers that the enforcement of the agreement would cause significant injustice to one or both of the couple or a child of the marriage.
  • Where one or both of the couple have failed to give full disclosure of assets and property before the agreement was signed.
  • Where the agreement is made fewer than 21 days prior to the marriage.

In Miller-v- Miller and McFarlane-v-McFarlane dealing with ancillary relief matters the Court established three strands, ‘the requirements for fairness’, financial needs, compensation and sharing. These three strands have led to the further development of matters that the Courts will take into account when dealing with prenups.

In Macleod-v-Macleod [2008] – A view was taken that prenups were a matter for parliament as guided by the Law Commission and post-nups could be treated as maintenance agreements and were therefore binding upon the parties subject to Sections 34-36 MCA to vary them.

In the Supreme Court decision of Radmarcher (2010) there has been a very significant shift towards recognition of prenups and post-nups.

The majority decision can be summarized as follows ‘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.’

In doing so the Court asked itself three questions:

  • Were there circumstances attending the making of the agreement that detracts from the weight that should be accorded to it?
  • Were their circumstances attending the making of the agreement that enhance the weight that should be accorded to it; the foreign element?,
  • Did the circumstances prevailing when the court order is made make it fair or just to depart from the agreement?

In addition to this the court considered further circumstances in which it would not be fair to hold the parties to an agreement, and these were summarized as follows:

  • Children of the family. A prenuptial agreement cannot be allowed to prejudice the reasonable requirements of any children of the family.
  • Autonomy. It would be paternalistic and patronizing for the court to override the parties’ agreement simply on the basis that the court knows best.
  • Non matrimonial property. The distinction between matrimonial and non-matrimonial property as identified in Miller and McFarlane would be particularly significant where the parties have made an express agreement as to how such assets are to be dealt with in the event of a divorce.
  • Future circumstances. The longer the marriage has lasted, the more likely it may be that it would be unfair to hold the parties to an agreement which had been entered into when contemplating an unknown and unforeseen future.

In Attar –v- Attar [1985] – This was a short marriage of 6 months, there were no children there was an order for periodical payments to the wife for a limited term so that she could re-adjust herself.

In C-v-C [1997] –Short marriage with a child, Periodical payments with no term upheld by the Court of Appeal.

In K-v-K [2003] – The court ordered a small capital payment to the wife and thereafter went on to deal with the child of the family as if it were a separate application under Schedule 1 to the Children Act 1989

The principle in Foster-v- Foster was removed by White –v- White and the principles of equality and the concept of sharing apply as much to short marriages as to long marriages.

In the event you need further advice and assistance on prenuptial agreements please contact the senior partner who deals with these aspects.