Should prenuptial agreements be legally binding in divorce cases?
The Law Commission has said prenuptial agreements should be legally binding only after financial responsibilities of the separating couple and children have been met. The Law Commission warns that introducing prenuptial agreements without protection of the parties' needs would be "very damaging.” Would qualifying nuptial agreements give couples autonomy and control? Or is English law going too far?
The Law Commission's warnings were made in a report on the reform of matrimonial property laws. The commission calls for there to be standard formulas introduced to help couples resolve disputes over financial settlements. It also calls for official guidance to be published on what constitutes to legitimate "financial needs.”
The Katrin Radmacher case
British courts already recognise prenuptial agreements as enforceable under divorce law in the UK. The policy was established in 2010 in a case that involved a German heir, Katrin Radmacher, seeking to protect her £106 million fortune should her marriage breakdown.
The British Supreme Court ruled that a pre-nuptial agreement between Katrin Radmacher and her ex-husband Nicolas Granatino is binding. Originally Mr Granatino was awarded more than £5 million in a divorce settlement. This figure was however reduced to £1 million following an appeal that cited the couple's pre-nuptial agreement. In the agreement Nicolas Granatino agreed not to make any claims on his wife's hefty fortune should they divorce.
Subject to stringent reservations
The 'Matrimonial Property, Needs and Agreements' proposal drawn up by the Law Commission will consider the treatment of pre-nuptial, post-nuptial and separation agreements. The commission recommends that "prenups” should become legally binding subject to stringent reservations. It suggests new rules on how one partner in the marriage should meet the genuine financial needs of the other partner in the case of divorce.
"It will remain open to spouses to make agreements about financial needs, but such terms will not be contractually enforceable and will be subject to the courts' scrutiny for fairness as they are at present. A qualifying nuptial agreement will not remove the parties' ability to apply for, and the courts' jurisdiction to make, financial orders to meet their financial needs,” the report states.
Combat the "gold digger”?
It has also been suggested that the reform package is likely to include rules to deter "gold diggers”. A man or woman who brought their own assets into a marriage, such as a property or inheritance, would not be at risk of losing their assets in the event of divorce.
Criticisms of the recommendations
The reform suggestions have not been met without criticism. Critics say such legally-recognised deals undermine marriage. Traditionally, British courts have ignored prenup agreement. Judges have instead maintained a commitment to split a couple's assets on the merits of the individual case. However, this traditional practice was undermined in the 2010 Radmacher case.
Patricia Morgan, an author and expert on family law, is one such critic of prenuptial agreements. Ms Morgan believes such practices "undercut commitment between marriage partners.”
While some remain sceptical that such legally binding arrangements would undermine marriage and is an example of English law going too far, others welcome the suggested reforms. They believe it will give couples more autonomy and control.
If you have any concerns or issues relating to family law, one of Tracey Miller's sensitive and caring family law experts can provide advice in many aspects of family law, including divorce and separations.
What are your thoughts about making prenuptial agreements be legally binding? A demise of traditional marriage values? Or a necessary and wise precaution to give couples and families more financial control if a marriage breaks down?