What are pre-marital agreements?
Pre-marital agreements are sometimes known as pre-nuptial agreements. It is essentially a contract made between two people before they get married concerning how the property or money belonging to the couple should be divided in the event of a separation or divorce.
Are they enforceable in an English court?
Traditionally the courts of England and Wales take the view that an agreement of this nature is by itself not enforceable. Pre-marital agreements are in fact enforceable in other countries such as Sweden, Canada and New Zealand. These types of contracts also feature in certain religions such as Islam. In 1998 the Government produced a White paper called ‘Supporting Families’ which considered whether it should be appropriate to make these contracts made before a marriage legally binding. At the moment however there have been no actual proposals put forward in order to bring about any legislation to implement any new reforms.
What does recent case law suggest?
It appears that recent divorce cases decided by the courts in England and Wales are being more influenced by any pre-marital agreements made prior to the marriage. In the case of K V K in 2003 the Judge stated that pre-marital agreements are important and that they should be considered by the court. Interestingly the judge felt that the wife in the case should not be limited to the share of finances agreed in the pre-marital agreement and that she could be awarded more. However in the case of Macleod v Macleod decided in 2008 the Privy Council concluded that a pre-marital agreement made before a marriage would carry less weight that an agreement that was reached during the marriage. It can be seen that it is currently not possible to say for certain how a court will use a pre-marital agreement in the event of a divorce and currently there are no definite answers on the matter. However it appears that the court is taking more of an interest in the agreements and that more developments in the future could lead to more affirmative decisions.
Advantages and Disadvantages of a pre-marital agreement
In theory if a pre-marital agreement is made and then the couple involved actually adhere to what was previously agreed then this obviously avoids the need for a great deal of cost and extra involvement by solicitors. As there would be less need for ancillary relief proceedings which deal with payments and maintenance agreements between couples after a divorce has begun. It could also be argued that being open about financial issues at an early stage could potentially help with any future marital problems and encourage a relationship of openness. These types of arrangements can also help to protect property or children from an earlier marriage. In situations such as this the family finances can become very complicated with previous families and children and it could be argued that an agreement could potentially sort out these types of issues early on.
It is highly likely that the couples involved may wish to have independent legal advice before such an agreement is made and this will obviously come at an extra cost. This means that an agreement beforehand may not necessarily prove to be cheaper. It could also be argued that a pre-marital agreement would only represent the assets belonging to the couple at the time the agreement was made and over time situations can change. An agreement such as this made early on in a relationship may not accommodate for such changes and may be too rigid for any future developments that could occur.
What could happen in the future?
The Law Commission is due to make a report on marital property arrangements and is expected to publish their report on the matter in 2012. As the pre-marital agreements are appearing more frequently before the courts now and in light of recent property prices and the fact that more and more people are having second marriages, it seems more likely that more people will begin to make these types of arrangements and that they will become more common. In light of this it seems likely that the Law Commission will highlight reform issues and could make future pre-marital agreements hold much more weight in court proceedings.