11 August 2015

Practical not romantic, the pre-nuptial

Recent cases have shown the courts increasingly prepared to uphold pre nuptial agreements unless it is clear that the arrangements agreed fail to meet the financial needs of one party or the other.   Where the agreement has been prepared thoroughly and both parties have been properly legally advised there is a real likelihood that it will be effective, and the couple should expect to be held to it in future years.

In a recent case, a pre-nuptial agreement was upheld to the extent that it protected the majority of the assets of the wife, a wealthy heiress, from being shared. However, despite the husband's agreement not to claim against the assets she had inherited prior to their marriage, the judge did decide that the wife should pay her husband £1.7 million for a lifetime housing fund on divorce, which was needed to meet housing needs of the husband and of their children.

Whilst this part of the decision may have been galling for the heiress, crucially for her the pre-nuptial agreement meant the husband did not receive the money outright; the award was for his lifetime only and the fund would revert to her on his death.

The decision reinforces the principle that couples who sign a pre-nuptial agreement will be held to its terms unless the agreement fails to meet their basic needs. Even if part of the agreement can be challenged by one party it can still be a useful tool in curtailing the breadth of financial claims on divorce and in protecting family wealth.

The courts are increasingly taking the view that couples who enter into a pre-nuptial agreement freely, and with advice as to the implications of signing, should be held to it.


Nuptial Agreements

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