Matrimonial Agreements 

It is becoming increasingly popular for parties entering into marriage to consider what would happen if the relationship broke down.

There are various reasons why individuals enter into Pre and Post-Nuptial Agreements.  For example, there are those who wish to protect their business interests and those who wish to protect inheritance/trusts.  Those who marry later in life may wish to ensure the financial split protects not only the children of the marriage but those from prior relationships.  Providing the agreement is drafted, considered and executed properly it can save the parties thousands of pounds on solicitors and Court costs, notwithstanding the time and effort involved pursuing such proceedings.

The advantages of talking about splitting the assets before the pending nuptials (as opposed to waiting for the event to take place) are: –

  • It causes less stress and heartache for both parties.
  • It will ensure a less acrimonious, if not amicable separation, which is most important in situations where children are involved.
  • The agreement can be helpful in so far as ironing out other smaller issues that may evolve post- separation.

The well- known case of Radmacher v Granatino 2010 UKSC 42 changed the way Courts viewed Pre-Nuptial Agreements.  In that case, the Supreme Court said the Agreement should be granted weight when entered into freely by the parties with a full appreciation of it’s implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement.  In this case, the trial judge awarded the husband £5.5. million, a property for contact purposes with the children and periodical payments for the children.  The judge made it clear that his award would be restricted to reflect the fact he had agreed to the terms and been aware of the effect of the agreement.  The Wife successfully appealed and considered the Judge at first instance should have limited the Husband’s claim to his role as a father. The Court determined the property should not belong to the Husband absolutely but only during the time he cared for the children.  The income fund was capitalised to cover his needs until the youngest child attained the age of 22 years.

In the recent case of Ipecki v McConnell 2019 EWFC 19 this consisted of a Husband with modest means and the Wife, heiress of Avon.   In this case, Justice Mostyn refused to give effect to a Pre- Nuptial in circumstances where it failed to meet the needs of the Husband, notwithstanding the fact he received no independent legal advice.  The Court determined that the agreement was made in New York and therefore validity must be determined there irrespective of where the parties resided.  The parties were unlikely to have intended a result in one party being left in a predicament of real need and such result is unfair.

In this case, the parties agreed the agreement would be governed by New York Law.  In New York, little weight would have been placed on the agreement.  The Husband was granted £1.3 million consisting of £445,000 Duxbury fund and £750,000 to purchase a home.

When considering entering into matrimonial agreements, the key points for consideration are:-

  1. The Deed must be contractually valid. Consideration needs to be given to which jurisdiction it is intended and potentially, how the agreement works in another country if the parties are thinking about moving.
  2. Both parties must enter into the Deed at their own free will without undue pressure or duress.
  3. The Deed must ensure the parties capital and income needs are met. The Court is unlikely to approve a situation where one party is in real need.  The agreement must be fair.
  4. Each party must fully disclose their assets and enter into voluntary disclosure.
  5. Consideration must be given to any children born and what sort of property will be required for the parties to live in with or without children?
  6. Whether the parties will work and what their income capacities will be?
  7. What assets the parties may receive or have during the marriage by earnings, gift or inheritance.
  8. Parties must receive legal advice.
  9. Each party intends the agreement shall govern financial consequences when a marriage comes to an end.
  10. Signed well in advance 3 to 4 weeks

In 2017 the government considered the Law Commissioners recommendations on the enforceability of qualifying nuptial agreements as part of a wider consideration of family law.  Although the government accepts and acknowledges the recommendations, unfortunately, there are no firm plans for implementation.

For further advice on your legal position relating to a relationship breakdown and pre or post nupitial agreements, please get in touch.

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