Pre-Nuptial Agreements To Be Enshrined in Law
Pre-Nuptial Agreements To Be Enshrined in Law
Proposals from the Law Commission are expected to see pre-nuptial agreements become enshrined in law. The proposals will include a draft Bill which is expected to garner cross-party political backing when it is released later this month.
The plans will include the ability for couples to “ring-fence” property or gifts they bring to a marriage from being shared following divorce. Office for National Statistics figures show that 118,000 couples legally divorced in 2011 and it is estimated that over 40% of all marriages sadly end in divorce. Couples embarking on second marriages tend to be more aware of the importance of pre-nuptial agreements due to their own personal experience and are more likely to seek such an arrangement.
The Marriage Foundation estimates that just 31% of second weddings will end in divorce. Pre-nuptial agreements are already increasing despite not yet being legally binding. However, the Supreme Court did rule in 2010 that judges could take them into account if certain conditions were met. The ruling followed the case of Nicolas Granatino who turned to the Supreme Court after appeal judges has reduced his divorce settlement from more than £5m to £1m. The ruling said: “it will be natural to infer that parties entering into agreements will intend that effect be given to them”. Resolution, an association of 5,000 family lawyers, favours legislation to “put beyond doubt” that marital agreements are legally binding. To ensure that a pre-nuptial agreement has any influence in divorce proceedings currently it is essential that both parties have received legal advice, have provided full financial disclosure, that the agreement was drawn up at least three months before the marriage and that no undue influence should not be imposed by either spouse. Talk to a pre-nuptial and family law specialist for general and specific advice on past and future marital agreements.
What is a pre-nuptial agreement? Amanda Melton, a Partner in IBB’s family law team, described a pre-nuptial agreement as “a document that lays down what to expect when a marriage breaks down“. In an interview regarding pre-nuptial agreements on BBC 3 Counties radio, Amanda outlined the advantages of pre-nuptial agreements such as reduced legal costs associated with a marriage breakdown, faster divorce settlements and reduced stress.
Celebrity focus can be misleadingPre-nuptial agreements have thus far only received widespread media attention in relation to celebrity couples, perhaps transmitting the misleading impression that they are something not to be considered by the public generally. A reported agreement between actors Michael Douglas and Catherine Zeta-Jones has been the subject of much speculation, especially when the couple separated recently after 13 years of marriage. Ms Zeta Jones was quoted as saying: “I think pre-nups are brilliant.” On the other hand it was widely reported that the musician Madonna did not have a pre-nuptial agreement in force when she married British film director Guy Ritchie. They married in 2000 and separated eight years later. The details of the financial settlement were kept private. It is also reported that Charles Saatchi and Nigella Lawson signed an agreement – it is likely more will be heard of this in the coming months.
Proposal that maintenance should be for set periodThe upcoming Bill is likely to include safeguards that will not leave one spouse disproportionately financially disadvantaged and will advise strongly that both parties take independent legal advice . It is also predicted to propose that maintenance should be paid for a set period to encourage independence. This system is already operated in Scotland where maintenance arrangements are limited to two or three years.
Enshrining pre-nuptial agreements in law would require new legislation to be passed, which is still possible within the current Government’s term. However, some observers feel that the Justice Secretary, Chris Grayling, will want to consider the recommendations thoroughly and the Bill’s journey into law will not conclude until the next parliament. A contract signed today may also become enforceable once the Bill is enacted. Whilst some people believe that pre-nuptial agreements are only applicable to the super-wealthy and famous, or are “unromantic” and an admission that a marriage is doomed to fail, there is a growing realisation of their usefulness and value should the worst come to pass in a marriage. This trend can only accelerate if and when the agreements become enshrined in law.