Is any pre-nup better than none? Not at all…

A pre-nuptial agreement is a legal agreement entered
into by two individuals ahead of their marriage, and a
post-nuptial agreement is the same but after the event.
The agreement will usually set out how the couple wish
their assets and income to be divided should they later
separate or divorce. Whilst these types of contracts have
long been common place in America, there is increasing
evidence that more and more couples in England and
Wales are considering whether they should put such a
document in place before they get married.

It’s absolutely correct to say that pre-nuptial agreements
are not currently legally binding in England and Wales;
however, the court will probably take a pre-nuptial
agreement into account when overseeing a case and
is likely to uphold it, as long as certain safeguards have
been met. In fact, in December 2018, the Court of Appeal
ruled that ‘a fair and valid agreement will restrict a
divorce court award and protect family or trust assets and
the reputation of the family and its advisers, and an unfair
agreement will be destined to fail.’

The facts of the case in question Brack v Brack [2018]
EWCA Civ 2862 are somewhat unusual in that the
parties signed up to no less than three different nuptial
agreements all prior to their marriage. The marriage
lasted for 20 years and by the time the couple separated
they had two children and combined estates of £11m.

Had the court upheld the agreements, the wife would
have only received £560,000, amounting to just 5% of the
couple’s combined wealth. The court not surprisingly ruled
that whilst the agreements were validly made, they were
only one of the factors to consider, and in this case, their
application would not meet the wife’s reasonable needs.

There are valuable lessons to be learnt from this case. A
pre or post-nuptial agreement can be very important in
protecting your finances where one party to the marriage
has, or acquires significant assets, perhaps from family
wealth or the sale of a business. But the drafting of such
a document must be fair and reasonable and any
document that is essentially capricious or designed to ‘rip
off’ a spouse will fail.

Key moment actions

• A pre-nuptial agreement must be signed at
  least one month before the wedding, allowing
  both parties time to consider the contract they
  are entering into.
• Each party will need to provide full financial
  disclosure of their own assets, a schedule of
  which forms part of the agreement.
• Each party will need to instruct their own
  solicitor from different law firms to advise them.