Monday, June 04, 2007

Romance is dead

"Last year more than two-thirds of lawyers saw an increase in demand for pre-nuptial agreements, said business advisers Grant Thornton's." So reported BBC News yesterday. However, a word of warning to any wealthy spouse-to-be: pre-nuptial agreements are not (yet) legally binding in this country. As Mark Harper, solicitor for John Charman, put it: "Any client who comes to me wanting a prenup who is concerned about protecting their assets, the advice I give has to be they shouldn't get married."

3 comments:

  1. May I ask a (slightly) substantive question? A family law solicitor was being interviewed on BBC News 24 yesterday on this precise issue and made pretty much the same comments you have. She also said that should pre-nups start to carry more weight, then one of the factors that the courts would take into account would be the fairness of it.

    This got me to thinking that (one assumes), the large payouts made to the former spouses of wealthy individuals (usually the man) have been made under the principles of equality under the law, so that contributions to a marriage are treated as being of comparable value. This then got me to thinking that it seems unlikely that a court would entertain a pre-nup as being 'fair' if it had been drawn up specifically to circumvent these principles (given that equality and fairness should go hand-in-hand). What are your views on this? It is all hypothetical given that at the moment they are not legally binding, but it will be interesting to see how the law develops.

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  2. Of course, it all depends upon the definition of 'fair'. For example, Resolution has suggested that pre-nuptial agreements should become legally binding, subject to an overriding safeguard of 'significant injustice' to either party or to any child of the family. This seems to me a lower 'yardstick' than the court would use were there no agreement, thus 'allowing' many agreements to 'get through', which in turn would create more certainty and reduce disputes. There would, of course, have to be the usual other safeguards, such as independent legal advice and full disclosure before signing the agreement.

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  3. To respond to Belle de Jure - One of the reasons for the Charman type payouts to the former spouses of wealthy individuals is indeed the "yardstick of equality" argument and the assumption of equal-but-different contributions. However there is also the 'partnership' argument - "I stayed at home and loked after the children becasue that was my role in the partnersip, it was based on a joint assumption that we would both then live off your earnings/pension when we retired, and it's too late for me to go back and start a career"

    The ourt has to try to make a settlemnt whcih is fair - which doesn't automatically mean equal.

    A pre-nup would disprove this 'unspoken assumption' - arguably a settlement based on a pre-nup would be fair as both parties were fully aware from the beginning how assets would be split and could plan accordingly.

    s25 of the Matrimonial Causes Act says that the Court should "have regard to all the circumstances of the case" - whcih would include whether the parties had a pre-nup and if so, the circumstances in which it was made (full disclosure, equal bargaining power, any undue pressure, any change in circumstances, such as the birth of children, since the agreement was signed, etc.)

    My own view is that while pre-nups are not enforceable they are still very useful, as they mean that parties have to consider finacial issues before they get married, and this means that they can identify differences in attitudes to money, different expectations etc.

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