Member Article

What next for pre-nuptial agreements following Law Commission report?

By Antony Ball, family law associate at the Doncaster office of hlw Keeble Hawson

On the 27th February 2014 the Law Commission will publish a report on whether pre-nuptial agreements should become legally binding on divorce.

Although pre-nuptial agreements are increasingly taken into account by the courts there is no guarantee at present that the terms will be upheld when a couple divorce. The court instead retains a broad discretion to arrive at a solution according to the specific facts of each case. Whilst this undoubtedly has advantages, the fact that no two cases are quite the same often means uncertainty, resulting in litigation and expense.

The task of the Commission will therefore be to examine how to introduce a greater level of certainty without making the law so rigid that injustices arise.

There is no guarantee that the Government will follow whatever recommendations the Law Commission makes. That said, there appears to be general political support for pre-nuptial agreements and a movement towards couples being able to determine their own outcomes on separation through Mediation which avoids going through the courts and the Collaborative Law process where each person appoints their own collaboratively trained lawyer and separating couples and their lawyers work things out face to face.

While we await the findings of the Law Commission, it is clear from cases that continue to hit the headlines that having a pre-nuptial agreement in place is far better that not.

If you are contemplating a pre-nuptial agreement, consider the following steps:

1. It is always recommended that each party obtains their own independent advice from a specialist family lawyer prior to signing the agreement.

2. Ensure there is accurate financial disclosure. This will help to show that you were both fully aware of the financial implications of the agreement.

3. Avoid duress or undue influence. The agreement must be freely entered into and not by force or coercion. Ideally it should be completed and signed at least 21 days before marriage.

4. Make provision within the agreement for future charges such as the birth of a child. You may also want to include a periodic review of the terms to ensure they remain relevant and appropriate.

5. Finally, the agreement must be ostensibly fair. A settlement that is heavily weighted in favour of one is more likely to be set aside particularly if it leaves the other in real need.

If pre-nuptial agreements are to gain prominence, the Law Commission needs to address the safeguarding issues that ensure they are based on accurate financial information, that there is no undue pressure to sign - and that the terms are demonstrably fair to each party.

Despite the current uncertainty - and whatever the outcome of the Law Commission report - it seems certain that we will see clear rules making it easier for couples to decide when they get married what should happen if their relationship ends in divorce further down the line.

In the meantime, those with a pre-nuptial agreement will have far more protection than those without.

For advice on creating a pre-nuptial agreement, to discuss the implications on divorce or separation as well as the use of Mediation and the Collaborative Law process, contact Antony Ball or Vanessa Fox at hlw Keeble Hawson. www.hlwkeeblehawson.co.uk

This was posted in Bdaily's Members' News section by hlw Keeble Hawson LLP .