Preparing for after the ‘happily ever after’

Posted by Naomi Hayward

Senior Associate & Collaborative Lawyer

Valentine’s Day is upon us and with love in the air many of us will hear the joyful announcements of engagements with enthusiastic planning of weddings to follow.

Whilst most marriages are founded on the promise of a ‘happily ever after’, unfortunately the reality is that as many as 42% of marriages will end in a divorce  for one reason or another and most of us are familiar with the emotional roller coaster of a separation, either through personal experience or the experiences of those close to us.

With this is mind, wouldn’t it be great to agree before you got married (and when you still love each other) how you would divide your assets, if the unfortunate happened and you found yourselves facing a separation?  Wouldn’t this minimise the stress around what is likely to be one of the most difficult times of your life and also minimise lengthy and expensive Court proceedings?

Well it appears that the Law Commission agrees as they have announced they will be publishing a report on 27th February 2014 which will review the current law on pre-nuptial and post-nuptial agreements and the options for reform .

Although we will have to wait until the 27th February to find out exactly what the recommendations are, the press have been speculating that the Law Commission will be making recommendations to Parliament in support of enshrining pre-nuptial agreements in law and that it will be supported by a draft Bill for Parliament’s consideration.

This report is also very timely as there has been yet another recent case at the High Court, BN v MA [2013] EWCH 4250 (Fam), about the enforcement of a pre-nuptial agreement.

In this case, Mr Justice Mostyn provided some useful guidance about the factors to be considered if a pre-nuptial agreement is subsequently disputed.  Here, the husband and wife signed a pre-nuptial agreement in May 2012 and subsequently married in June 2012.  They each took independent legal advice and the content of the agreement was “intensely negotiated”.  They signed clauses saying they intended the agreement to create a legal contract between them in the event of the breakdown of their marriage and they were satisfied with the legal advice they had received.  They separated in August 2013 and the wife issued an application to the Court for the full range of financial claims available on divorce, despite the fact that she had signed the pre-nuptial agreement which was supposed to deal with the division of the assets on divorce.

Mr Justice Mostyn said “…the principle object of the exercise in this case (as indeed in every case where a nuptial agreement is signed) is to avoid subsequent expensive and stressful litigation; and it is for this reason…that the law adopts a strict policy of requiring the demonstration of something unfair before it will open the Pandora’s Box of litigation…”

He went on to say that the following principles should be followed when considering the enforceability of pre-nuptial agreements:

1. “No agreement can ever be allowed to prejudice the reasonable requirements of a child.”

2. “Respect should be accorded to the decision of a married couple as to the manner in which their financial affairs should be regulated, particularly where the agreement addresses existing circumstances and not merely the contingencies of an uncertain future.”

3. “No agreement can overreach basic need.”  For example, it cannot leave one party in a state of destitution.

4. There is no requirement for full and frank disclosure as “it requires only a sufficiency of disclosure to enable a free decision to be made.”

In this case, Mr Justice Mostyn found that the pre-nuptial agreement provided sufficiently for the wife and children and the wife failed to satisfy the Court that this agreement should not be upheld.  Therefore, the terms of the pre-nuptial agreement were upheld and the wife is not be allowed to continue with her application for the financial remedies.

So will the Law Commission’s proposals be along the lines of the principles applied by Mr Justice Mostyn?  Or will they go further in their suggestion for enshrining the principles into law?  Family lawyers across the country will be waiting with bated breath for the publication of the report on the 27th February 2014.

In the meantime, I would suggest it is still sensible to consider whether a pre-nuptial agreement would be appropriate for you and your partner before you make your vows to one another.


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