In recent years there has been a rise in couples choosing to prepare pre-nuptial agreements before their wedding day. Historically there has been a misconception that pre-nups are for individuals with extreme wealth and fame, however this is not the case.
More couples are choosing to enter into pre-nuptial agreements before their wedding day as a sensible way to protect their pre-marital assets and provide a safety net just in case the marriage does not work out.
Whether the rise in pre-nuptial agreements is due to more second marriages or couples choosing to marry later in life, it is clear the popularity of pre-nuptial agreements is only going to increase. The Marriage Foundation recently found that 1 in 5 marriages now involve prenuptial agreements and discussions around pre-nups is becoming the new norm.
The landmark case of Radmacher [2010] set the criteria that the Court uses when assessing whether a pre-up should be upheld on divorce. The Court will consider:
- If both parties have received independent legal advice before signing the agreement;
- If the agreement was signed at least 21 days before the wedding;
- Whether there has been any suggestion of duress, fraud, undue influence or misrepresentation before a party has signed the agreement;
- If the parties have exchanged financial disclosure and have made enquiries as to the other parties financial position;
- Whether it is fair to hold the parties to their agreement in the present circumstances.
It is prudent for pre-nuptial agreements to also include review clauses, so both parties can review the terms of the agreement and decide if there needs to be any updates as the marriage progresses. However, for many couples who enter pre-nuptial agreements, they do not remember to review the agreement and their pre-nup ends up collecting dust in a drawer.
Nockolds Recent Successful Case of NM v PM [2024] EWFC 199 (B)
Nockolds recently successfully represented the Husband in the notable case of NM v PM [2024] EWFC 199 (B) which concerned a pre-nuptial agreement and this case is currently being reported in the legal press as setting an important precedent in pre-nuptial cases.
The facts of this case are novel and fascinating. The Husband was a Solicitor, and the Wife was a Family Barrister. The Wife decided to draw up a pre-nuptial agreement the night before the couple’s wedding with the intention of protecting her property which was acquired before the marriage. Neither the Wife nor the Husband received independent legal advice and they did not exchange financial disclosure, but they were both satisfied that their legal knowledge was sufficient.
The couple began divorce proceedings some 14 years after the pre-nuptial agreement was signed and had not reviewed or updated the agreement since it was first prepared, despite there being a clause in the agreement that the terms should be reviewed every few years. At the time of separation, the Wife no longer believed the pre-nuptial agreement was fair. The Wife argued that because the Husband had converted his assets (that were noted in the pre-nup such as insurance policies and inheritance monies) and had purchased rental properties which provided a good income stream, that the agreement was now unfair, and the couple should not be bound by it.
Whilst on a technical basis the agreement did not meet the legal criteria that the Court usually considers when assessing whether a couple should be bound by a pre-nup, the Judge found that the pre-nup should be upheld. The Judge found that the Wife should have reviewed or updated the agreement if she felt it was no longer fair. Nockolds acted for the Husband in the divorce proceedings and the Husband successfully retained all of his assets, including his significant pensions which remained untouched, and a clean break was ordered. This was despite the parties being married for 14 years and there being a significant disparity in the Husband and Wife’s pensions and overall assets.
This case not only highlights the importance of entering into a pre-nuptial agreement but also serves as a stark warning that even though a pre-nuptial agreement may not be compliant with the Court’s usual criteria, it can still be upheld by the Court, and you can still be bound by its terms.
It is becoming more common that the Court is binding parties to the pre-nuptial agreements that they have entered into. Therefore, it is vital that you not only receive independent legal advice at the time of preparing the pre-nuptial agreement, but also throughout your marriage, so the agreement can be reviewed and updated to reflect the changes in your circumstances. Otherwise, you run the risk of being bound by an outdated agreement that you have completely forgotten about, and you could potentially lose out on divorce.
Read more about this fascinating case that Nockolds successfully worked on here.
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