28th January 2011
The Law Commission has published a consultation on the future of prenuptial agreements as it seeks to determine whether couples should be able to make binding arrangements governing financial matters in the event of the breakdown of a relationship.
The consultation paper asks whether couples should be able to enter into a binding agreement not to seek ancillary relief in the event of divorce or dissolution. It also considers whether such agreements should be able to encompass all of a couple’s property or to contain only terms relating to pre-acquired, gifted or inherited property.
The Commission ‘provisionally proposes’ that for such agreements to be enforceable, they should be in writing, with each party required to have taken legal advice, and the party seeking to enforce the agreement must have made full disclosure of their financial situation.
A move towards full, unbreakable prenups in which couples say in advance of their marriage how their assets should be divided in the event of a divorce appears to be discouraged. In the consultation paper such ‘cast-iron’ prenups are described as “stark” and not “appropriate in English law”.
Professor Elizabeth Cooke, the Law Commissioner leading the project, said: “Under the current law the starting point for the resolution of financial division on divorce is the discretion of the court. Some feel that where couples have reached agreement, the courts should not be involved; yet the courts’ approach is primarily protective, and some feel that they should not be wholly excluded. Our consultation paper considers the arguments for and against reform and examines how a new approach might balance the desire of some couples to plot their own future with more certainty against the need for safeguards against exploitation and the creation of hardship. This is an issue that needs to be handled with care,” she said.
Lawyers welcomed the move. “At last some light may be thrown on this very difficult area,” said Graham Coy, family law partner at Mundays Solicitors. “The real problem is knowing when people will be held to what they have agreed in a prenup and this is what the Commission will need to deal with.”
The full consultation paper is available at www.lawcom.gov.uk/marital_property.htm. The consultation closes on 11 April 2011.
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