While everyone enters into a marriage with the best of intentions, sometimes things can go wrong and the relationship can break down.
For most separating couples, a key part of the divorce process is the division of assets between them. One way to protect your assets is to draw up a pre-nuptial agreement with your partner, setting out in advance how your respective assets will be divided if the marriage breaks down. Although pre-nups are not currently enforceable in the UK, the courts can take them into account when deciding what financial orders to make and in recent years have been more willing to do so.
However, pre-nups which fail to meet reasonable needs are unlikely to be upheld by a court, as demonstrated by the recent case of Luckwell v Limata, in which millionaire’s daughter Victoria Luckwell was ordered by a judge to pay £1.2 million to her ex-husband, Frankie Limata. Although Mr Limata had brought no assets to the relationship and had already signed a number of agreements waiving his right to any of his ex-wife’s money, the court found that Mr Limata had been left without a home and therefore the existing pre-nups did not meet his reasonable needs.
Pre-nups have featured heavily in the news during the past few weeks with the Law Commission – a body that reviews areas of the law that have become too complicated, outdated or unfair and proposes reforms to the Government – recently recommending that such agreements should be given legal force.
It has suggested that “qualifying nuptial agreements” should become enforceable contracts. This includes pre-nuptial, post-nuptial and separation agreements, which the Commission calls “marital property agreements”.
The proposal is that these would be enforceable contracts, not subject to the scrutiny of the courts, enabling couples to make binding arrangements about the financial consequences of divorce.
Requirements for an agreement to be regarded as qualifying include both parties receiving legal advice when it is made, the agreement not being made within the 28 days immediately before the wedding or civil partnership ceremony and that both parties share information about their financial situations when they make the agreement.
Every couple and their circumstances are different so, for some, a pre-nuptial agreement would never be an option while other people might not even consider entering a marriage without one.
Whilst we must wait and see if the Government takes forward the Law Commission’s recommendations, for anyone considering a marital property agreement, independent advice from a specialist family lawyer is crucial.
At Palmers Solicitors, we are highly experienced in advising on such matters. For further information, please contact us.