Pre and post nuptial agreements look set to be binding in future
Pre and post nuptial agreements are likely to be given binding status, in a move that’s intended to give couples a more predictable outcome on divorce.
The Law Commission’s report, Matrimonial Property Needs and Agreements, proposes that the agreements be enforceable as contracts, but only after both partners’ financial needs, and any financial responsibilities towards children, have been met. Both parties would also need to have disclosed all material information about their financial situation and both must have received independent legal advice.
Under the current law, couples can make pre- and post-nuptial agreements but no one can be certain they will be upheld, although they have been gaining in weight since the Supreme Court ruling in the 2010 landmark case of Radmacher v Granatino. The Courts generally look favourably if an agreement has been “freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement”.
But at the same time that the Law Commission published its proposal, an heiress to a fortune from her father’s media company which created Bob the Builder, was being told to buy her ex-husband a house, at a cost of around £1.2m, despite a series of apparently cast-iron nuptial agreements being in place.
The ex-wife is Victoria Luckwell and her ex-husband was Francesco Limata, who agreed that he would not make any claim either during or after the marriage in relation to his wife’s separate property or to gifts made by her wealthy family. The pre-nuptial agreement was followed by two supplemental agreements during the course of the marriage, when the wife received gifts from her parents.
And despite the judge agreeing that if the pre-marital agreement had not been made, the marriage would not have taken place, and neither would the further gifts to the wife have been made without the supplemental agreements, he pointed to the importance of fairness. Justice Holman concluded that the former husband was “now, on any view, and in the context of this case, in a predicament of real need” and that it would be wrong for the children to experience two wholly different lifestyles when visiting each parent.
Family Partner, Rebecca Silcock at Mogers solicitors comments: “At first sight, this case may look as though it’s going against the flow, but is really a reflection of the role the family courts have always taken, which is to do the best by families following divorce, particularly where children are concerned. It’s about fairness, and whilst it is certainly likely that nuptial agreements will have greater weight in future, that principle of fairness will remain an overriding factor.”
Rebecca added: “Talking about money is often seen as unromantic, especially in the run up to a wedding, but learning how to sit down and discuss financial matters openly is really a very good way to enter a marriage. A pre or post-nuptial agreement may not be appropriate for every couple, but where there are significant assets or children from previous relationships, it certainly makes sense. If a split unfortunately happens, then anything that helps couples more easily negotiate a settlement has to be good.”