‘Judges say they will ignore pre-nups unless couple are rich,’ reads a recent tabloid headline, before stating that the majority of spouses who sign prenuptial agreements are wasting their time, since only the very wealthy can expect their wishes to be honoured.
Here, Kuits’ family team explain why, whilst the above article has a grabbing title, those who have entered into such agreements – and may now be concerned that they have done so without good reason – should not be worried.
Going Beyond the Headlines
The guidance in question comes in the form of a leaflet that was put together by the Family Justice Council, entitled ‘Sorting out Finances on Divorce 2016’ .
The guide seeks to help Litigants in Person, who will no doubt find the prospect of negotiating an agreement without legal advice extremely daunting.
This point itself is extremely important: the guidance is aimed at those who cannot afford lawyers upon divorce and who will, in the majority of circumstances, not have many assets between them to consider upon separation.
“In such scenarios,” says Katie McCann, Head of Family for Kuits, “it is and always has been the case that the couple’s needs will be the priority, and no family lawyer in the country would advise otherwise.”
She goes on: “The article states that only the very wealthy can expect their pre-nup wishes to be honoured. Of course, no such blanket statement is actually made within the legal guidance and the leaflet’s reference to the fact that pre-nups are often irrelevant correlates to the fact that they are not suited to low net-worth individuals, for whom the guidance has been written for. There is of course, a large group of individuals sitting between such people and the ‘mega wealthy’, many of whom could benefit from having a prenuptial agreement.”
“Another ‘conclusive’ statement contained within the article is that the only case a pre-nup might be of use to an ordinary couple is when a spouse hopes to keep a specific item of personal or sentimental value, such as a family heirloom, pet or vehicle.
Again, there is no such absolutism contained within the guidance that actually states that a couple who would not have any surplus cash left over in the event they divorce might want to use a pre-nup instead to protect a specific item, rather than have it determine the division of all of their assets.”
Prenuptial Agreements UK – Looking at the Facts
Under current UK family law, prenuptial agreements are not, and never have been, legally binding contracts.
Instead, they are used to set out how a couple would ideally like their assets and liabilities to be divided in the event of a divorce and, if entered into correctly – i.e. they are fair, there has been no duress and there has been parity of advice – the courts will likely consider them to be a factor when deliberating the divorce settlement as a whole.
Whilst there have been suggestions by the Law Commission to transfer prenuptial agreements into binding agreements, this has not yet come to fruition and no legal guidance has suggested otherwise.
Both the article and the guidance do correctly point out that the main factor when dealing with the division of assets post-divorce is the needs of both parties.
This will be true for couples with or without a prenuptial agreement, and for couples with or without wealth. A prenuptial agreement will always be disregarded if its contents do not enable both parties’ needs to be accommodated, and this will be true even if the couple in question are extremely wealthy.
The Family Justice Council’s guidelines are an extremely useful tool for divorcing couples who cannot afford legal advice. The advice contained in the guidance has been written to cater for a specific audience and this should be remembered when reading it.
The law surrounding prenuptial agreements has not changed and remains firmly in place.
Couples who have entered into prenuptial agreements will hopefully have done so with legal advice and will have been educated to the fact that they are not currently legally binding, but will serve as a strong indication for the judge if the appropriate steps have been taken.
Katie McCann is head of family law and in-house counsel at Kuits Solicitors in Manchester City Centre. She has a special interest in resolving high value relationship breakdown disputes.