Law Articles

Are pre-nuptial agreements binding? 29/04/2019

A pre-nuptial agreement is an agreement parties enter before marriage which deals with how their assets should be divided in the event of separation and divorce. Such agreements are not automatically legally binding in England and Wales, so the Family Court is not bound by the terms of such agreements and sometimes makes orders in divorce proceedings which differ from the terms of the parties' agreement. To ensure that a pre-nuptial agreement is given as much weight as possible by the Family Court in the event of it being challenged in divorce proceedings by one or both parties, the divorcing couple should provide each other with full financial disclosure, they should have independent legal advice and the terms of their agreement should be fair given all the circumstances of their marriage. A regular review of the pre-nuptial agreement is also necessary to ensure it does not become "out of date" and therefore more susceptible to being successfully challenged in divorce proceedings.

The most recent case where the Family Court was asked to deal with a pre-nuptial agreement is Ipekçi v McConnell (2019). Morgan McConnell was a cosmetic heiress, being the great- granddaughter of the founder of Avon products. The parties met in 2003, started to cohabit in 2005 and planned to marry. On the intention of their marriage a pre-nuptial agreement was prepared by the wife's solicitor in November 2005. The husband sought independent legal advice on the agreement by a solicitor who represented the wife in her divorce from her first marriage. The husband was advised the agreement was heavily weighted in the wife's favour but he nevertheless signed the document and the parties married 15 days later. The Judge in this case, Mr Justice Mosytn, decided to ignore the pre-nuptial agreement and made a financial award to the husband in the sum of £1.3million. When the Judge was determining this matter the following issues were considered:

•  the husband was advised by the wife's former solicitor. The Judge was not satisfied that the solicitor who gave the advice was not compromised by virtue of having acted previously for the wife in her first divorce;
• the agreement was made under the laws of the State of New York and its validity was to be determined in accordance with those laws regardless of where either party resided at the time of death, divorce or separation. This raised concerns that the husband did not fully appreciate how this could affect the agreement;
• there were further difficulties whereby the agreement referred to the husband receiving an equal share of any increase in the value of three properties owned by the wife which were non-matrimonial. These properties were disposed of during the marriage which would result in the husband receiving nothing;
• the agreement did not take into consideration the husband's needs;
• the standard of living enjoyed during the marriage was high and therefore could not be ignored;
• the husband had not made provision for himself financially during the marriage and he had no pension provision; and
• further consideration was given by the Judge in respect of the husband's housing needs. There were two children of the marriage. The husband needed to be reasonably housed in a property where they could stay with the important factor that they didn't perceive their father to be the "poor relation".

In this case, the Judge determined it would be wholly unfair to hold the husband to the pre-nuptial agreement and awarded him a lump sum of £1.3 million. The wife or her estate would however receive back £375,000 in the event of her husband's death.

Even though pre-nuptial agreements are not automatically legally binding in England and Wales, if the parties take the necessary steps to ensure the agreement is drafted properly (as described as above) it is highly likely the Family Court will uphold the terms if disputed by one or both parties in divorce.

For further information and advice on this issue, and other family law issues, please contact us for a free initial consultation on 01992 306 616 or 0207 956 2740 or email us.