Pre-Nuptial Agreements: The “Binding Myth” – Why English Law Still Refuses to Bind Them

What is a pre-nuptial agreement and why enter into one?

If you are planning to get married or enter into a civil partnership, you may wish to enter into a pre-nuptial agreement setting out what should happen to your money, property and other assets if the relationship later breaks down. Entering into such agreement does not mean you are anticipating separation. Rather, many couples find pre-nups reassuring, particularly where one partner has significantly greater wealth, income or inherited assets they wish to protect

A pre-nup can also help ring fence assets acquired before marriage or partnership, such as family inheritances, which one or both parties may not wish to become ‘matrimonialised’. By clearly recording each persons intentions regarding the family home, joint accounts, personal property and any debts, a pre-nup can reduce uncertainty and avoid the emotionally charged disputes that often arise during separation.

The binding myth.

Couples often assume that such a document is automatically binding, that it conclusively determines how finances will be divided once the relationship ends. However, in England and Wales it is not currently possible to create a fully binding pre-nuptial agreement.

In Radmacher v Granatino [2010] UKSC 42, the Supreme Court held that the courts 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 means that whilst pre-nups still carry significant weight, they are not decisive. If the agreement fails to meet one parties basic needs, or is heavily one sided, the court may depart from some if not all of the agreement.

Importantly, Radmacher also confirms that pre-nups cannot prevent either party from applying to the court for financial provision, nor can it restrict provision for any children of the marriage. Legal advice is therefore essential to maximise the likelihood that the agreement will be upheld as ‘fair’,

What will make a pre-nuptial agreement more likely to be binding?

Courts have indicated that in order for an agreement to be ‘fair’ the following will be taken into account: –

• Full Financial Disclosure: Each party has enough information about one and others finances to make an informed decision as to whether they are happy with the terms of the agreement.
• No pressure or duress: That neither party felt pressurised by the other party into entering the agreement i.e. that there was no undue influence or duress
• No fraud or misinterpretation: Whether there was any fraud or misinformation by a party in relation to the agreement
• Substantial Fairness: Whether the terms of the agreement are substantially fair i.e. the extent to which the agreement provides for both parties basic needs to be met in the event of separation and
• Independent Legal Advice: Whether both parties to the agreement had independent legal advice before entering into it.

How Everys can help.

Our family team will be able to assist you in drafting a bespoke agreement that is tailored to your particular circumstances as well as advise you on what matters to specifically address within the agreement.

If you are a couple and considering entering into a pre-nuptial agreement prior to marriage or civil partnership, our experienced lawyers can provide you with independent legal advice and guide you through the process.