It has been an interesting journey for those who have entered in to pre and post nuptial agreements over the last 5 years.
The law relating to Nuptial Agreements has developed following the Supreme Court decision in Radmacher – V – Granatino when it was decided that when considering the role of the Nuptial Agreement in a financial claim on divorce, the starting point is the relevant legislation, being the Matrimonial Clauses Act 1973, namely Section 25. Section 25 MCA takes into account a number of factors, including but not limited to the following::
- The income, earning capacity and financial resources of both parties now and in the future;
- The financial needs, obligations and responsibilities of the parties;
- The parties standard of living, the age of the parties and duration of the marriage;
- Any disabilities;
- Contributions made towards the family, both past, present and future, material and otherwise;
- Conduct that would be inequitable to disregard and any potential financial loss to the parties.
No agreement between the parties can supersede the legislation, or oust the Judge’s discretion to decide on the appropriate division of assets on a divorce. This means that a Nuptial Agreement cannot stop a spouse from applying to the Court for financial provision from the other and it follows therefore that pre and post nuptial agreements are not legally binding. However, they may be persuasive and will form evidence of a financial division of family property as set out in the case Stack v Dowden.
A pre or post nuptial agreement will have a substantial impact on the Judge’s decision in many cases and in the Radmacher case, it was stated that the Court should ‘give effect to any 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 their agreement.
However, in order to be considered seriously by the court, the agreements must meet a specific set of criteria, namely that
1) The agreement must be freely entered into and there must be no undue pressure to sign.
2) The parties must feel that they are on an equal footing and freely able to negotiate the terms of the agreement with one another.
3) The parties must have sufficient time to consider the terms of agreement and receive the relevant legal advice as to the effect of its terms.
4) The terms of the agreement must be fair.
5) The Court will also take into account individual circumstances, such as the parties’ emotional states at the time of making the agreement and factors such as age, maturity and life experience of long term relationships.
6) Both parties should be in possession of all information material to their decision to sign the agreement before signing it, so that they fully understand the implications of the agreement. This usually includes an additional schedule of all assets and liabilities that each party holds.
7) The parties should both have the intention that the agreement is to binding.
This is a simple and non-exhaustive list as to the requirements for pre and post nuptial agreements and there is a wealth of information relating to each point above. If you would like to discuss this in more detail with a qualified solicitor, please do not hesitate to contact Gemma Antoniou.
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