The Law Commission today are to put forward proposals to the government to consider making pre and post-nuptial agreements legally binding making it easier for couples to manage their finances once they have separated.
Currently, married couples and civil partners can make agreements but the court is not legally bound to uphold those agreements. The Law Commission says that should the proposed law be enacted by Government, married couples and civil partners will be able to make a binding agreement about how their property or finances should be shared if their relationship breaks down.
I am seeing more and more clients who are choosing to protect their future finances by way of an agreement before they marry, a pre-nuptial agreement, or even after and during the course of their marriage, a post nuptial agreement, in order to define their assets and clarify how their assets will be dealt with in the event of a separation.
It is expected that should the proposals by the Law Commission for marital agreements become binding, they will be most popular for those wanting to protect assets for their children’s future inheritance and those considering a second marriage. Certainly, for the clients that I see it does make financial sense for them to have pre-made arrangements with their partners should the marriage break down especially when the parties have significant assets from a previous marriage or historic family wealth. However, I am of the view that marital agreements will soon become the standard norm and will be seen by the majority as good financial planning intent on taking the stress and uncertainly out of Divorce, which it is so often associated with.
The Law Commission has recommended that legislation be enacted to introduce “qualifying nuptial agreements”. These would be enforceable contracts, not subject to the scrutiny of the courts, which would enable couples to make binding arrangements about the financial consequences of divorce or dissolution. “Qualifying” agreements should therefore include the following conditions:
• Both partners must have had legal advice
• Both partners must have disclosed all relevant information about their finances
• A pre-nuptial agreement must have been made at least 28 days before the wedding or civil partnership
Prof Elizabeth Cooke, the law commissioner for property, family and trust law, said that the change in law would give couples "autonomy and control, and make the financial outcome of separation more “predictable. “
Watch this space…
If you are considering getting married or are married and would like to discuss your future financial security through a pre or post nuptial agreement then please call our Family Team directly on 0113 336 3323
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