Prenuptial agreements in UK divorce law
Prenuptial agreements have not traditionally been enforced in divorce law in England. A divorce lawyer is often asked about the possibility of making a prenuptial agreement before entering into a marriage. The normal reason for asking is that at least one of the parties to the intended marriage wishes to preserve previously acquired assets from the jurisdiction of the divorce courts. Unwelcome though it is to the questioner, the answer in almost all cases is that the jurisdiction of the divorce courts cannot be ousted in this way and that a pre-nuptial agreement is hardly worth the paper it is written on.
In order to understand why this is so one has to realise that the tradition of the English divorce courts is to look at all the assets of the marriage at the time of the divorce and to distribute them – “his”, “hers” and “theirs” – in whatever way they see fit and accordance with the perceived needs of the parties and of any children. This is done in accordance with certain principles laid down by statute (which are summarised on the right) and case law. Indeed, it is an attitude which is shared by Parliament which framed the law and this paternalistic approach is very different from the more “free market” approach which prevails in the US and which allows the parties to a marriage more freedom to regulate their own financial affairs in the event of divorce.
All the same, there are some good reasons for the English approach and it is not entirely irrational. For a start, it is not obvious how far a prenuptial agreement ought to be allowed to prevail before it is superseded by later events. For instance, an agreement which might seem very sensible in, say, the first year of a marriage might become increasingly irrelevant after the birth of children, a 30 year marriage, illness, bankruptcy or redundancy to name but a few of the factors which could affect any marriage at any time.
The truth of the matter is that it is extremely difficult if not impossible to foresee all eventualities and later events have a habit of quickly making previous agreements seem very irrelevant. Say, for instance, a man comes to a marriage with a sizeable fortune and his wife nothing. The man might wish an agreement to the effect that his wife should have no claim on his pre-existing wealth in the event of divorce. Indeed, this is one of the main reasons for wishing to make a pre-nuptial agreement. The wife might willingly agree to this because she might consider it fair and content to lay claim only to a share of those assets which were built up during the course of the marriage.
If this marriage were to break down after just over a year then the agreement may seem reasonable enough. But should it still be upheld if the marriage had lasted, say, five years and there were children? In the event that there was a divorce in the latter event the needs of the children would be the first consideration. It says so in statute. See the text to the right. Under such circumstances the English courts would almost certainly traditionally have said that the husband should part with some of his pre-existing wealth to provide accommodation for the children if the assets built up during the marriage did not suffice. They would in such circumstances regard the needs of the children and of the ex-wife as of more importance than upholding the validity of a pre-nuptial agreement.
In this respect the English courts have not traditionally allowed their discretion to be fettered by pre nuptial agreements entered into by the parties. They would not hesitate to ignore such agreements if they thought it right to do so. Nevertheless, there are circumstances under which the English courts can now give some weight to these agreements and these circumstances may become much more common as a result of the case of Radmacher v Granatino decided by the Court of Appeal and later pointedly confirmed by the Supreme Court.
Spouses involved in divorce in England always want to know on what basis the UK divorce law decides financial issues between husband and wife if the Courts have to decide the issue. Indeed, this is what is at the heart of most divorce cases. If there is a dispute it is more likely than not to be about money whether that is about periodical payments for a spouse, dividing the equity in the former matrimonial home or divorce and pensions. In fact, the relevant principles are set out in Section 25 of the Matrimonial Causes Act 1973 which, essentially, reads:-
”It shall be the duty of the court in deciding whether to exercise its powers ….. to have regard to all the circumstances of the cases, first consideration being given to the welfare while a minor of any child of the family who has not attained the age of eighteen.
25 (1) It shall be the duty of the court in deciding whether to exercise its powers …. to have regard to all the circumstances of the case including the following matters, that is to say –