Pre-nuptial agreements are persuasive, not binding, in English law and look set to remain that way for the foreseeable future, following a decision by the Privy Council, which stated that ‘the validity and effect of ante-nuptial agreements is more appropriate to legislative rather than judicial development’.
The decision not to enforce a pre-nuptial agreement was taken by the Privy Council in a hearing involving two US Citizens who are resident in the Isle of Man. The case was the first substantial one following the referral of the law on pre-nuptial agreements to the Law Commission last year.
Accordingly, any alteration in the law relating to prenuptial agreements will have to await a change in the law by Parliament.
However, the Law Lords agreed that an agreement entered into after a marriage is contracted (a ‘post-nuptial’ agreement) would generally be enforceable, provided there was no exploitation of a dominant position by one of the parties to it. Such an agreement should always be made with the benefit of independent legal advice on both sides.
The position remains, therefore, that a pre-nuptial agreement which has been properly drafted with legal advice taken on both sides, whilst not binding, is persuasive to the court regarding a couple’s intentions for the distribution of their assets should their marriage fail. Accordingly, a ‘pre-nup’ will, in many cases, be worth consideration, especially where the family assets are very substantial.
If a pre-nuptial agreement is not made, it is sensible for married couples who are able to do so to consider making a post-nuptial agreement, which will normally be effective if the appropriate conditions are met.
Says Pauline O’Rourke, “Putting in writing how family assets should be distributed in the event that a marriage fails may sound unromantic, but it can save much bitterness as well as money if the worst does come to the worst. We can advise you on the creation and negotiation of pre- and post-nuptial agreements.”