At the start of a New Year, our thoughts have turned to pre nuptial agreements, or pre marital contracts as they are now known. These have not been a large part of the everyday work for some of our members but it is clear that their popularity is increasing.
Pre nuptial agreements have been used for many years in other countries in particular in Europe to avoid being caught in a community of property regime from the date of the marriage. In the UK they were most frequently used where property eg farmland was both expected and needed to pass from generation to generation.
For many years in the UK it was understood and accepted that these agreements had no legal force. This changed, not by any statute passed by Government but by a ruling of the Supreme Court in 2012. Judges will now give considerable weight to pre- marital contracts that have been entered into with appropriate legal advice and sufficient knowledge of the surrounding circumstances and assets involved. It is also a good idea to have a reasonable period of time between the signature of the contract and the actual wedding day!
So where does dispute resolution come into this, as one might assume there is no dispute at this stage, pre wedding, other than over the seating plan. The collaborative law process is however ideally suited to sorting out the terms of a pre -marital contract as it is a forum in which both parties have a voice and can hear each other, assisted by lawyers who can inform the couple of the approach that is likely to be taken by a court on divorce and what they therefore need to think about in the agreement. All can discuss future scenarios and what will be needed, both to protect (say) pre -acquired wealth or property and to meet the needs of the more economically vulnerable person. Whilst one cannot exclude the right of the court to examine any agreement that seeks to set out what should happen if a marriage ends, the court is less likely to interfere if the pre marital contract both makes provision and explains the level of that provision, even where that might be less than the Judge might have ordered off his or her own back.
It is also possible to enter into such agreements after the marriage, as a post nuptial settlement, perhaps to address an inheritance received during the marriage that does need to pass onto one spouse’s children or as part of tax planning for future generations.
To approach either a pre or post marital contract as a two party discussion through collaborative law, hopefully gives them the best chance of existing alongside a long and successful marriage and so, never being needed at all. So many of us need no convincing to put insurance in place to help if the unthinkable event of terminal illness or other permanent incapacity came along, and a pre or post marital contract is very similar – it is preparing in advance for something you both hope will never happen but the aim is to make that event, whilst unwelcome, more easily navigated by all.