The Law Commission has recently published a report making recommendations on important aspects of family law. One of these aspects was their recommendation that pre-nuptial and post nuptial agreements (marital property agreements) be made enforceable by the family courts.
I am being asked more and more frequently to prepare pre-nuptial agreements, however they can presently not be enforced as contracts and they do not take away the court’s powers to make orders. The only way in which parties can achieve legal finality based on their pre-nup is to ask the court to make an order that reflects the terms of their agreement. Recent case law in the Supreme Court has said that this should be done unless the agreement would result in an unfair situation. This can still leave matters open to argument on the issue of what is “unfair”.
The Law Commission has suggested that new legislation be enacted to bring in the concept of “qualifying nuptial agreements”. It is proposed that these will be enforceable contracts which would enable couples to make agreements that are binding in the event of their divorce without the interference of the family courts. What is required in order for an agreement to constitute a “qualifying” nuptial agreement is that certain procedural safeguards would need to be complied with to ensure that the agreement is freely and fairly entered into and that both parties understand the rights that they may be giving up. It is also expected that the agreement would need to be concluded at least 28 days before the marriage. Notwithstanding all of this it is not possible for parties to contract out of meeting the needs of each other and of any children. Once again unless we have a clear definition of needs there will be a place for legal argument in the future. The report includes a draft bill called the Nuptial Agreements Bill and no doubt we will hear more about it. It is expected that this legislation will have the effect of turning case law into law.
Whilst some may not approve, it will certainly be useful to give couples great autonomy over their finances in the event of a divorce.