Pre-nuptial Agreements – Important Developments for Unmarried Couples

Recent months have seen the Law in this area being subjected to close scrutiny by the Courts. A recent decision now lead our Family Law Department to advise unmarried couples to be mindful of the clarification that the Law has now been given by this country’s higher Courts and the qualified support that has been given to the creation of pre-nuptial agreements. Essentially, an agreement such as this is designed to attempt to establish financial arrangements before the marriage as to how they would be upon the breakdown of the marriage. An agreement would include reference to what property, assets and pensions would form part of the matrimonial ‘pot’ upon the breakdown of the marriage and to what extent these assets and interests could possibly allow or remove claims by one party.

Pre-nuptial agreements are to the greater extent enforceable contractually in the United States and in developed legal jurisdictions such as France and Germany. This county has hitherto been slow in adopting such a positive approach to them with our higher Courts being aware of the possible pressures the financially stronger spouse could place upon the weaker spouse in negotiating such agreements. There are many ways in which unfair pressure could be placed by one spouse upon another either directly or indirectly leading to one party perhaps signing an agreement when an otherwise more considered approach on a different day may have led to a different outcome. Nevertheless, we have now reached the point where such agreements should certainly be considered and recommended in many instances to try and avoid the stress and upset of contentious financial proceedings upon the breakdown of a marriage.

Pre-nuptial agreements have over the last 7 – 8 years been given increasing weight by the Family Courts. It remains the case that the Divorce Court can still have the final say upon whether or not any such freely negotiated prenuptial agreement should be upheld. Quite sensibly, our higher Courts have taken the view that it is up to Parliament to tidy up the law relating to unmarried couples by legislation and not just Judges to determine whether or not such agreements should become contractually enforceable at law. A tentative view has now been reached whereby it should be accepted that both parties should accept the consequences following the breakdown of a marriage of what they agreed to prior to the marriage. It can now be said that the existence of a pre-nuptial agreement can be very persuasive if not absolutely conclusive in resolving financial issues upon the breakdown of a marriage.

It is clear that the law in the absence of defining legislation remains somewhat paternalistic to people entering into these agreements, but by the same token the common sense in allowing people to be responsible for their own decisions is now being afforded to would be spouses than ever before. The jurisdiction of the Divorce Court cannot yet be ousted and both parties should be fully aware of each other’s financial position and should be advised to take their own independent advice before of signing a prenuptial agreement.

The case of Radmacher v Granatino has taken considerable strides to clarifying the law. The prenuptial agreement in this case was agreed by two foreign nationals from countries which recognise these agreements. The agreement reached between them has been given decisive weight. Whilst we cannot advise with certainty as to when the law relating to unmarried couples will be clarified, it is safe to say that prenuptial contracts will increase in their number and in the light of this case will encourage the parties prior to a marriage to consider the financial consequences of its breakdown in advance of the marriage ceremony. Provided the parties are fully aware of the circumstances in which they enter into an agreement, are accepting of the other party’s financial position and do take or are given the appropriate opportunity to take their own independent financial advice, there is no reason to suggest that such agreements should not hold good under a later challenge by one spouse against the other.

Our family law department at R T Law will give full and exhaustive advice in relation to the issue of pre nuptial agreements.