‘Prenups’ reform on the cards
Prenuptial agreements, enabling couples to set out in advance how their assets are divided if their marriage or civil partnership breaks down, are set to be given legal force.
A recommendation that prenuptial and postnuptial agreements should become enforceable contracts came in a report published on 27 February by the Law Commission, which reviews areas of the law that have become too complicated, outdated or unfair and proposes reforms to the government.
The report stems from a project that included examining the legal enforceability of prenuptial, postnuptial and separation agreements, which the commission calls marital property agreements. Such agreements are not currently enforceable but the courts can take them into account when deciding what financial orders to make.
The report calls for legislation to be put in place to introduce qualifying nuptial agreements.The commission said: “These would be enforceable contracts, not subject to the scrutiny of the courts, which would enable couples to make binding arrangements about the financial consequences of divorce or dissolution.
“In order for an agreement to be a ‘qualifying’ nuptial agreement, certain procedural safeguards would have to be met. Qualifying agreements could not, however, be used by the parties to contract out of meeting the financial needs of each other and of any children.”
Typically, assets built up by the partners during the course of their marriage or civil partnership are split equally between them although individual cases will vary.
The commission said that in making its recommendation, it had “particular sympathy with those who wish to ensure that inherited or gifted property, or property generated before the relationship began, will be excluded from the sharing exercise provided that the other party’s needs are met and children are adequately provided for.”
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 at the time they make the agreement.