Are Prenuptial Agreements Legally Binding in the UK?
Prenuptial agreements are financially prudent and the sensible, if unglamorous, part of wedding planning.
In this blog, our family agreement solicitors examine whether a prenuptial agreement is binding in the UK.
Contact Evolve Family Law for prenup legal advice.
What is a prenuptial agreement?
A prenuptial agreement is an agreement an engaged couple can enter into before their marriage, outlining what will happen with their assets if their relationship breaks down and they separate or divorce.
A prenup should be bespoke to you and your financial and personal circumstances. You could choose a comprehensive agreement that covers all aspects of your finances or use the prenup to:
- Record what assets you both agree are family assets or non-family assets.
- To ringfence specific assets so your spouse will not be entitled to ask for a share of those assets.
- Record which court jurisdiction will be used to obtain a divorce and financial court order.
- Specify how you will resolve any disputes if your marriage breaks down, such as the use of family arbitration.
- Specify the financial settlement and how assets will be divided and needs assessed if the relationship breaks down.
What assets can a prenuptial agreement protect?
The assets you or your fiancée may want to ringfence and protect from future financial claims include:
- A property bought before your marriage or a buy-to-let property portfolio.
- Your pension if significant pre-marriage contributions were made into the pension fund.
- Lifetime gifts received from parents and grandparents.
- Shares in a family business.
- Savings and investments.
- A legacy or future inheritance.
- A distribution or future distribution made by the trustees of a discretionary trust.
- A financial settlement received after your divorce from your first husband or wife.
- A lottery win.
- A personal injury compensation award.
- Property or assets transferred into your name by parents as part of their care home fees planning strategy.
If you do not have any of these assets, a prenup can still be useful if you or your partner is likely to receive an inheritance or is the beneficiary of a discretionary trust.
Your fiancé or fiancée may be unsure about what a prenuptial agreement does and its status if you separate. They may therefore be wary about signing the document, especially if you have had time to consider what you think should be included in the agreement, but they have not. It is best not to make assumptions about your partner’s understanding of what a prenuptial agreement is and will do.
Prenuptial agreements and UK family law
Family law in England and Wales does not make prenuptial agreements automatically legally binding on the parties.
The law on financial settlements after divorce is contained in the Matrimonial Causes Act 1973 and in case law that judges should follow when making financial settlement rulings.
The landmark Supreme Court case of Radmacher v Granatino in 2010 remains the leading caselaw on the treatment of prenups in financial remedy applications. In summary, if a prenup was entered into freely and with full understanding, the courts should give it decisive weight, provided that its terms are fair and meet both spouses’ needs.
Prenups, although contracts, are different from commercial contracts, where there is certainty that a court will uphold the terms if it finds that a contract was entered into between the parties.
The legal status of prenuptial agreements and their enforceability
A prenuptial agreement is a contract. Although it lacks a statutory or legislative basis, it has legal status through case law, particularly the leading Radmacher court case.
In the Radmacher case, a French husband and a German wife entered into a prenuptial agreement before their marriage. The agreement said neither the husband nor the wife would make a claim on the other’s property if they divorced. The husband made a financial claim in England as the English court had jurisdiction. The wife argued that the prenuptial agreement should bind the husband, but the husband said it was unfair because circumstances had changed: the couple had two children, and he had not received legal advice or financial disclosure before signing.
The Supreme Court said that a court deciding on a financial settlement in financial remedy proceedings should uphold a prenup if it was ‘’ 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.”
Since the decision in Radmacher, there has been a series of court decisions on whether a spouse should be bound by the terms of the prenup, with spouses challenging the agreement on:
- The prenup safeguards in Radmacher and subsequent case law were not met, or
- The terms of the agreement were not fair or did not meet reasonable needs.
A specialist prenuptial agreement solicitor can help draft an agreement that meets the requirements for a prenup to be effective and, using their expertise and experience in negotiating financial settlements, to try to ensure that the court will conclude the agreement meets the parties’ reasonable needs or will give the agreement sufficient weight to limit the size of the financial settlement compared to the financial court order the court would have made if the couple had not signed a prenup.
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Case law considerations for an enforceable prenup
Case law recommends that couples and their prenuptial agreement solicitors follow certain requirements. If they do so, there is a greater likelihood that the court will issue a financial order in accordance with the terms of the prenup. There are no guarantees, as every decision is case-specific. However, a specialist prenup lawyer can advise on the requirements that will cause the greatest issues, such as fairness and needs.
The five requirements for a prenup to be upheld or given weight in financial remedy proceedings are:
- No coercion.
- Independent legal advice.
- Financial disclosure.
- Signed at least 28 days before the wedding.
- Terms are fair, and needs are met.
No coercion means the prenup must have been entered into voluntarily. Both parties taking independent legal advice and negotiating the contents can help establish that the prenup was not forced on one party to the marriage.
Financial disclosure may seem an odd requirement, as many engaged couples are reluctant to let family lawyers advise on financial paperwork, fearing that disclosure may unravel an agreement they have reached verbally with their fiancé or fiancée. However, a party to a prenup cannot give informed consent to the agreement if they do not know the value of the family and nonfamily assets, or the likelihood of further wealth through lifetime gifting, inheritance, or discretionary trust distributions of capital and income.
The requirement to sign the prenup at least 28 days before the wedding is to prevent agreements being presented at the church door and the financially weaker partner feeling pressured to sign so the marriage can take place. However, some agreements have been upheld even though they were signed days before the ceremony. Every prenup is case-specific, and the court assesses each factor before deciding what weight to give it.
Meeting all the requirements significantly increases the likelihood that the prenup agreement terms will be made into a court order or that the court will make a financial order in substantially the same terms.
Financial disclosure, fairness and needs in prenuptial agreements
The skill in drafting a prenuptial agreement lies in knowing the extent of the financial disclosure required to satisfy a court that both parties understood the other’s wealth and expectations, and in advising on fairness and needs.
If a family lawyer is advising the financially stronger party to a prenup, it is in their interests to ensure financial disclosure is provided and assets are accurately valued. Fairness and need take experience and expertise to assess.
Prenuptial agreement solicitors
Although prenuptial agreements are not automatically enforceable as contracts in family law, the court can make a financial court order in the same terms as the prenup, or make a significantly reduced financial settlement compared to what it would have ordered if there were no prenup.
When the formalities of a prenup are met and the agreement is carefully drafted to pass the fairness test, a prenup provides security and peace of mind.
Our family agreement solicitors can expertly help you finalise your prenup, ensuring the process is straightforward and stress-free so you can concentrate on the enjoyable aspects of wedding planning.
