Pre-Nuptial Agreements - Are they worth the paper they are written on?

The law relating to Pre-Nuptial Agreements has been vague. In the case of K-v-K in 2003 the court gave guidance as to what should be considered when entering into a Pre-Nuptial Agreement which were:

(a) there should be provision for independent legal advice;
(b) there should be full and frank disclosure of each other’s financial position;
(c) there should be fairness in that basic needs should be met;
(d) there should be provision for children should they be born during the marriage.

Even so, a Pre-Nuptial Agreement was still a factor amongst many that the court would consider when deciding on a financial settlement within divorce proceedings. Following the recent Court of Appeal decision the Pre-Nuptial Agreement is still one of the factors to be taken into consideration, but the emphasis on the guidance seems to have been relaxed.

It is no longer fatal for a Pre-Nuptial Agreement if one party did not take legal advice, they just have to have the opportunity of doing so. It is no longer fatal if there has not been financial disclosure, as long as each party has an idea as to the other’s wealth. There no longer needs to be provision in the Agreement for children, as the court may award one party sufficient assets to cater for the children’s needs, but only until they reach majority. Even the need for fairness was questioned.

The attitude of the Court of Appeal in respect of this Pre-Nuptial Agreement was that they would try where possible not to interfere with a contract entered into by two adults provided there was no undue influence, misrepresentation or fraud.

What is the future for Pre-Nuptial Agreements?

The recent case confirms that a Pre-Nuptial Agreement will be considered as one factor among others when deciding a financial settlement within divorce and in certain cases may well be followed.

The Law Commission is currently investigating the matter of Pre-Nuptial Agreements and will report to Parliament in 2012 as to whether there should be any change in the statute law.

In conclusion, a Pre-Nuptial Agreement may be worth the paper it is written on, provided certain provisions are made.

Teresa Foss
October 2009