Pre-nuptial and Pre-registration Agreements

Agreements that partners make before they get married or register a same-sex civil partnership are commonly referred to as pre-nuptial agreements and pre-registration agreements respectively. They typically deal with how the partners will hold their property during their marriage or civil partnership and what should happen to their property and maintenance payments after a divorce or dissolution of the civil partnership.

General
Do the courts take agreements into account at all?
Pre-nuptial v pre-registration agreements
Is there any point?

General

There is no law on pre-registration agreement for civil partners, nor is there a law on pre-nuptial agreements for spouses. Pre-nuptial or post-nuptial agreements are not binding in English law. There is no statutory provision for such agreements at all.

English law does not really know a “property regime” as other jurisdictions do either. If analysed, however, spouses and civil partners in this country hold property separately and are not for example liable for each other’s debts. On a dissolution of a civil partnership or on a divorce the court has a discretion to make any orders to pay lump sums, transfer property, share pensions or for maintenance payments as is fair (more on the page on financial orders). The court has a similar discretion to make provision from the estate of a deceased civil partner or spouse for the survivor.

The court needs to take into account all the circumstances of the case. What that means is a matter for continuous debate. For more details on this, please see the section on financial issues on divorce. There have been changes after several House of Lords decisions in recent years. The interpretation of the law may therefore be quite different at the time your marriage or civil partnership may end. It would be idle to speculate on all possible scenarios for that time for these reasons.

Do the Courts Take Agreements into Account at all?

However, in recent years the courts have taken an agreement reached between spouses more and more into account as part of all the circumstances of the case. To see how much weight to put on an agreement, the court will ask the following questions:

Did both parties have independent legal advice?
Was there full financial disclosure?
Is the agreement within what the court would order – is it “fair”?
Did both partners understand the agreement?
Were both partners properly advised as to its terms?
Did one partner put the other under any pressure to sign it?
Was one partner under any other pressure at the time they signed the agreement?
Did they willingly sign the agreement?
Did one partner exploit a dominant position, either financially or otherwise?
If there are children, were they contemplated in the agreement?
Has any unforeseen circumstance arisen since the agreement was made that would make it unjust to hold the parties to it?
Is the agreement clear in its meaning?
Would upholding the agreement lead to an injustice?

These questions are just examples of what the court will ask itself in a particular case and the outcome may vary depending on the particular circumstances.

There is therefore no prescribed form for a pre-registration or pre-nuptial agreement and each agreement will need to be tailored to the particular circumstances of each couple. In many ways, the more it has been tailored, the more likely it is to be upheld. The costs are therefore not fixed, as they would be for a will or conveyancing and they can be considerable. You should also think about this early as it will take several weeks to finalise the agreement.

Pre-nuptial v Pre-registration Agreements

Under English law any agreement between (future) spouses about whether or in how far the court should or should not make any financial orders on a possible future divorce undermines the whole concept of marriage, which includes that marriage is for life. There are therefore two reasons why pre-nuptial agreements are not legally binding in England:

They undermine the concept of marriage being for life because they contemplate divorce;
The court has an overall discretion to make financial orders to achieve a fair outcome on a divorce as set out above.

The first aspect does not apply to civil partnership, at least in theory. There is therefore an argument that pre-registration agreements should be looked at in a different way. However, whether the courts will accept such an argument remains to be seen. In the meantime you should treat a pre-registration agreement with the same amount of caution as pre-nuptial agreements.

The first point also does not apply to separation agreements and only to a lesser extent to post-nuptial agreements, which may therefore be given more weight than pre-nuptial agreements. Agreements made after the wedding or civil partnership registration have the added benefit of not falling so easily foul of an argument of undue influence because of time pressure. Of course if you wait until after the wedding or registration, your partner may no longer agree to sign an agreement. It is therefore probably worthwhile reaffirming an agreement made before the wedding or civil partnership registration formally some time after the wedding or civil partnership registration.

Is there any point?

You would only find this out if you were to test your agreement later in court. However, if you want to avoid having to share all your wealth with your partner, but are prepared to make reasonably provision to meet their financial needs, making such an agreement may be money well spent. Having an agreement that both partners subscribe to can also mean that you may not even argue about the issues later on and would be more likely to have an amicable separation. You can of course also agree that in case of a disagreement you will try mediation.

You could also use the collaborative process to agree a pre-registration or pre-nuptial contract.

For advice on your specific circumstances contact Andrea Woelke at Alternative Family Law: ring or email us.

April 2009

Alternative Family Law

Finances