The Pre-nuptial agreement is, by now, a widely recognised tool. Its rising popularity can easily be attributed to multiple features in media, entertainment and celebrity life alike. Kim Kardashian, Jessica Simpson, Ali Wong and Catherine Zeta-Jones are only a few of the household names who have publicly admitted to (and discussed) signing a prenup.

That is not to say prenups are only for the uber wealthy, or those in the public eye. Those marrying later in life, who have worked hard to build up capital, may want to consider a prenup. Equally, anyone who is getting married and bringing into the marriage assets or investments of value, may wish to protect the same against claim from a spouse.

Ultimately, most agreements are carefully drafted and signed with the intention of being stored in a drawer and never touched again. However, some couples may well need and benefit from that agreement – and having the peace of mind of knowing exactly how finances will be split upon a divorce may prove invaluable.

Are prenups legally binding?

The first thing to keep in mind is that prenuptial agreements are not automatically considered legally binding in England and Wales. This is especially surprising to expats from countries like the US or Australia, where such agreements are generally considered enforceable.

However, that does not mean that they are dismissed out of hand by the Court in this jurisdiction. In fact, in recent case law, Judges have expressed that prenups should be upheld and given strong consideration to as part of financial remedy proceedings. In 2010, the Supreme Court ruled that Courts should give effect to a pre-nuptial agreement that is: (i) freely entered into by each party; (ii) with a full appreciation of its implications; unless (iii) in the circumstances it would not be fair to hold the parties to their agreement.

Crucially, for your prenup to be upheld, the above criteria must be met. These are outlined below and fully explained in the interest of clarity.

“The agreement must be freely entered into by each party…”

What this means is that the Court wants to be satisfied that each party signed the agreement because they wanted to, and not because they felt coerced or forced into doing so. The Court will be looking into whether there was any pressure by the spouse or their family to sign the agreement, or whether one party only signed an agreement due to fraud or misrepresentation.

The Court is also likely to consider the timing of the agreement – the general rule is that prenups should be signed no earlier than six months before the wedding, and no later than 28 days before the wedding. This shows the Court that appropriate time was taken by the parties to negotiate and agree on the terms of the prenup, without rush.

The textbook example is the bride (or groom) who, at a few days from the wedding, is presented a prenup and told in no uncertain terms that should they not return the signed agreement, the wedding will simply not go ahead. This scenario may seem extreme and obviously fictitious, but it perfectly illustrates circumstances in which a prenuptial agreement is very unlikely to be upheld by the Court.

“…with a full appreciation of its implications…”

In addition to the above, a Court would be unlikely to uphold a prenup if it found one (or both) of the parties did not have a full appreciation of what the consequences of the agreement would be. There are quite a few factors that go into understanding a prenup. For instance:

1. Both parties should have the benefit of independent legal advice from a qualified solicitor who specializes in family law;
   
   
2. Both parties should provide financial disclosure of all assets, investments, pension and income at the time of the agreement, including details of any inheritances likely to be received; and
   
   
3. Both parties must be fit of mind and able to understand the agreement when the same is explained to them. If one party has a learning disability or has problems processing information of a legal nature, then special care should be taken to ensure they truly have understood the terms of the prenup.

“…unless (iii) in the circumstances it would not be fair.”

Most importantly, a prenup must be fair.

Any prenup agreement that seeks to leave either party without the means to meet their reasonable financial needs will not be upheld by the Court. Accordingly, prenups need to be expertly drafted, in a way that ensures that the needs of any children are met and that neither party is left without appropriate resources to maintain a lifestyle similar to that enjoyed during the length of the marriage. This is especially true for longer marriages.

To ensure fairness, there should be semi-regular reviews of the terms of the agreement to address changing circumstances (for example, it is common for agreements to have to be reviewed upon the birth of each child).

Ultimately, it is not uncommon for the financially weaker party to be provided for in a way that is less generous than the Court’s own approach – but it must not be unfair.

So, what happens if these criteria are not met?

If, for example, parties fail to renew an agreement after the birth of each child, or the agreement is signed only three weeks before the wedding, the prenup is not rendered immediately invalid. However, its strength and persuasiveness declines sharply. If the parties decide to divorce, and one of them is not convinced the agreement should be legally binding, then it will be the Court’s mandate to consider the agreement and decide whether it should be upheld having regard to all the circumstances in each matter.

If you have signed a prenup you regret, and you and your spouse have decided to separate, do contact a solicitor as soon as possible. A solicitor will be able to review your prenup with a clinical eye and help you challenge the same.

Should I get a prenup?

Despite all the caveats, solicitors generally agree: prenups are still worth it. In circumstances where there are pre-marital assets which warrant such protection, then prenups can be a brilliant (if slightly unromantic) tool. As long as they are properly drafted, and signed in the right circumstances having considered the criteria laid out by the Supreme Court, then they can provide certainty and a robust framework to follow in case of relationship breakdown.

As outlined above, for a prenup to be upheld both parties need to take independent legal advice in respect of its terms. At Edwards Family Law, we have a wealth of experience in relation to prenups. Whether you wish to enter into such an agreement, or you’re just considering your options, please do not hesitate to contact us. A member of our team will be happy to help.