Introduction
By Sana Saddique
A prenuptial agreement (or ‘prenup’) in the UK is a legal document drawn up between a couple before their marriage to outline how each of their assets will be divided between them in the event of a divorce.
Assets including property, debts and income are usually covered in a prenuptial agreement to help couples avoid any financial surprises if the relationship were to break down in the future.
Prenuptial agreements are more likely to be put in place when one partner already has, or is likely to acquire, more assets than the other. For example, those with a large inheritance, landowners, business owners or couples who are marrying in later life or who are entering into a second marriage.
Do I need a Prenup?
The main reason to get a prenup is to make it clear how you and your partner's assets will be divided in the event of a relationship breakdown.
Typical prenuptial agreements tend to cover:
Protecting your children’s inheritance or specific assets
Protecting inherited money, assets or savings
Giving you both a say in how assets will be split if you decide to divorce
Allowing one partner to retain full control of business ownership
Protecting you from your partner’s debt
Are Prenups Legally Binding In The UK?
Traditionally, the English Courts have been reluctant to endorse prenuptial agreements. This is mostly due to the fact that if enforceable, prenups prevent or limit the ability of the Court to intervene in the event of a marital breakdown. As such, historically, prenuptial agreements have not been valid in the UK and cannot automatically be upheld in a court of law.
However, in the last couple of decades there has been a shift away from this thinking to a more “case by case” approach.
In 2002, in the case of M v M it was acknowledged that there was a prenuptial in place and it was stated that the Court will take the view that the terms of the agreement should be reviewed and considered by a Court before making any financial decision or determining the level of weight, if any, that should be attached to the terms of the pre-nup. By 2003, in the case of Kay v Kay it was determined that the Pre-nuptial agreements should be upheld as to disregard it would be inequitable. The leading case law in this topic is now the case of Radmacher v Granatino 2021 which, despite requiring an appeal, upheld the terms of a prenuptial agreement.
The above cases show a clear shift in how prenuptial agreements are being perceived in the UK under law. It is now generally seen that a prenuptial agreement is valid in the UK but is not automatically enforceable.
This means, having a prenuptial agreement in place does not automatically mean it will be upheld in the event of a marital breakdown. However, it will be taken into consideration by the Courts and if fair and reasonable, it could be upheld. At the time a prenup is entered into, a Court will expect that the agreement was drawn up based on both parties having the benefit of independent legal advice. Additionally, the Courts will want to ensure that:
neither party was under any duress or pressured in any way to enter the prenuptial agreement
each person understands the financial position of the other in terms of their income, liabilities etc.
A process of full financial disclosure should ideally take place to ensure each person is fully aware of what they are agreeing to/ waiving their rights to claim over, before entering into a prenuptial agreement.
What Will The Court Consider?
In the event of a marital breakdown, the Court will consider a number of factors when deciding whether to uphold the terms of a prenuptial agreement. The Court will look at the prenup in the context of the circumstances in which it was made and the effect it would have if the couple were now held to those terms, at the point of the marital breakdown. It may be the case that a lot has happened since the time of marriage when the prenup was entered into, and the time frame of the breakdown of the marriage. For example, a wife may have entered into a prenup at the time of marriage when she was in a fairly equal financial position to her partner. However, some 20 years later, after facing domestic abuse, losing her job and having a disabled child to take care of, it could be argued that the situation has changed considerably, and the original terms agreed to are no longer fair to bind her to or uphold.
If the necessary requirements surrounding the making of the prenuptial agreement have been observed, the Court will then want to ensure that at the point the relationship breaks down and the prenup is being relied upon, the consequences of holding the couple to the agreement will not put either one of them, or more importantly a child, in a position of grave financial hardship.
Conclusion
It’s safe to say this is an evolving area of law and there is no straight forward answer as to the validity or enforceability of a prenuptial agreement. However, it is clear that if parties wish to protect particular assets especially if they have been attained prior to the marriage or through inheritance for example, then there may be sufficient grounds to rely upon a prenuptial agreement being appropriate. If you are considering a prenup and have any questions about whether it is likely to hold up in court you can reach me via Lawhive.
Sana is a Family Law Solicitor, Court Advocate and 2x Legal Awards finalist. She undertakes work on divorce matters, financial proceedings, child arrangements matters and various other aspects of private family law including co-habitation matters, change of name deeds and separation agreements.