Dealing with the finances on divorce or following a separation can be very worrying. It is important to get legal advice quickly to reduce some of that anxiety.
Our dedicated family team can advise you of your rights and options and assist you in reaching a financial outcome with respect to the family home or other assets, including properties and pensions; and any income needs, through negotiation, mediation with a specialist facilitator (mediator), or through a Court decision.
These legal agreements allow couples to set out what they say should occur in relation to their assets and any financial support to each other in the event of their marriage breakdown. Whilst at present these agreements are not strictly legally enforceable, the purpose of entering into such agreements is to remove the discretion that the Court may exercise in the division of assets and income to ensure fairness.
The fact is that not all marriages last and unfortunately marriages do break down. The purpose of having a prenup is to try to avoid the acrimony and cost of having to deal with a financial dispute if the marriage breaks down.
A prenuptial agreement is just one of a range of marital agreements which can be drawn up including:
The purpose of entering into a Prenup is effectively to protect one party’s pre-acquired assets or inheritance. For an agreement to be upheld by the court you will need to follow recommended guidelines as to best practice to ensure that the agreement is fair.
The type of assets that the agreement could protect include Non-matrimonial assets acquired before the marriage or assets held in family trusts or assets received in inheritance whether before or during the marriage so as to ‘ring-fence’ and exclude them from any division between the parties, thereby being retained by the economically stronger party.
Before an agreement can be drawn up there will need to be full and frank financial disclosure by each party as to their financial position when entering into an agreement. This information is set out in a schedule which is attached to the agreement providing a summary of each party’s financial positions.
If you are the financially stronger party you will need to ensure that the other party cannot be said to have been subjected to duress into entering the agreement. You should make provision for a sufficient period of time to be factored into the preparing an agreement to allow both parties to receive independent legal advice as to the consequences of entering into an agreement. For Prenups we would advise drafting of an agreement 6 months before the date of marriage.
The agreement can set out what assets are to remain held by each party and separate; what is to happen to any assets acquired during the marriage and what should happen to any joint assets. The agreement can say whether any spousal maintenance is to be paid and if so for what duration and what should happen in the event there are any children. The agreement can also deal with any debts or liabilities that the parties may incur before or during the marriage and what provision should be made on the death of either party.
We would advise that you provide for the agreement to be reviewed after a period of time to take into account changing circumstances. These reviews can be set at time periods of your choice for example every 3 or 5 years.
The court has discretionary powers to redistribute a couple’s income and capital on divorce taking into account of all the circumstances of the case to achieve fairness between the couple. This includes any marital agreement entered into by the parties. This means that at present it is not possible to make a Prenup agreement which cannot be interfered with by the court.
The Supreme Court in Radmacher v Granatino  established the principle that:
"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 the agreement"
This meant that if a prenuptial agreement had been freely entered into by a couple with full understanding by the parties it would be upheld unless it would be unfair.
In 2009 the Law Commission conducted a research project entitled Matrimonial Property, Needs and Agreements which was published in 2014. It recommended legally binding prenuptial agreements and in order for these ‘Qualifying Nuptial Agreements’ to be enforceable certain requirements would be necessary:
The Law Commission report makes a clear the shift from the ‘Radmacher’ principle of ‘fairness’ to ‘needs’. As such it will not be possible for parties to contract out of meeting each other’s financial needs on divorce or those of any children of the family.
At MW Solicitors, our mission is to "To make quality legal services accessible to everyone" including those couples who wish to make preparations for every eventuality set up a Marital Agreement.
Our team of dedicated Family Lawyers have years of experience dealing in all aspects of Family Law and can help you to get the right agreement which meets your individual need. If you would like to speak to one of our specialist Family Solicitors call us today on 0203 551 8500 or email us at firstname.lastname@example.org.
When you are separating, a real concern for many couples is what the financial outcome of the split will be. Questions about, whether you'll be able to keep the house? or whether your children will have to change schools?, or can you afford to pay the bills?, and what will happen about pensions? are the kind of questions we are often asked.
If you and your partner are married or in a civil partnership and can't agree on how to split property and sort out your finances you can apply to the courts for a financial remedy.
The courts are able to make a range of orders for cash payments, transfer of property or other assets, maintenance and pension sharing. The position is not the same for unmarried couples who have been living together.
We would encourage you to come and see us for an initial meeting, so you fully understand your options. For most people a session with a mediator will be best before making an application to the court. We would work with you alongside that process. Mediation isn’t right for everyone, or sometimes things drag on or you just cannot reach agreement, so a court application is then necessary.