Divorce shake-up and binding pre-nups

The Commission is pitching for legally binding prenuptial agreements as part of wide-ranging reforms to matrimonial law in its report published this week - Matrimonial Property, Needs and Agreements. Proposals include clarifying the meaning of “financial needs” so the term is applied consistently across the courts, and an online “divorce calculator” to help couples calculate their financial obligations.

Pre nups would be binding only if certain criteria were met, such as entering into the arrangement willingly and after receiving independent financial advice, and only after the financial needs of the parties and any children were met. Currently, the courts will often enforce pre nups so long as both parties entered into it willingly and after seeking independent legal advice, but they don’t have a binding obligation to do so.

Sarah Anticoni, partner at Charles Russell, says that binding agreements will bring a sigh of relief for international personnel residing in England. “This may be a real opportunity for people to protect their assets, especially for second or subsequent marriages and may also ensure and encourage parties to think about the financial responsibilities they are entering into when they marry and have children and not leave such expenses to the state. [These proposals] may also start an extended period of research and consultation which could, if swiftly implemented, have far reaching consequences for couples divorcing in England and Wales. London might become not just the divorce capital of the world but its epicentre.”

Christina Blacklaws, director of family law and policy, The Co-operative Legal Services, says: “At this stage, pre-nups are not fully legally binding but they are becoming increasingly important in divorce cases.

“The announcement by the Commission means that pre-nups, from now on, will become even more important. While pre-nups and post-nups should not be seen as a quick and easy catch-all solution, conflicts can be much more easily resolved if such formal agreements clearly state what your preferences are before divorce proceedings get under way.”

Stuart Ruff, associate, Thomas Eggar, adds, however, that any such agreements will still need to satisfy certain specified requirements to be binding: “Individuals’ financial needs – especially those of any children – must be met and an agreement will not be binding if it provides for the couple to contract out of their financial responsibilities. That is why it is recommended that couples take legal advice in order for the agreement to be binding. The risk is that some people will reach an agreement between themselves without taking legal advice and believe they have a binding agreement when in fact they don’t as it does not meet the safeguarding criteria.”