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The Law Commission’s proposals on nuptial agreements

The Law Commission has on 27 February published recommendations in relation to the enforceability of marital agreements, and to clarify the law relating to “needs” on divorce or dissolution of a civil partnership.

The recommendation is that “qualifying nuptial agreements” will be enforceable on divorce/dissolution of a civil partnership provided that certain procedural requirements are followed, and as long as “financial needs” are met.

The procedural requirements are as follows:

  1. The agreement must be contractually valid (and so for instance not be entered into under duress)
  2. It must be made by deed and contain a statement confirming that the parties understand its effect
  3. It must not be made within 28 days of the marriage/civil partnership
  4. There must be financial disclosure
  5. There must be legal advice

It will not be possible to waive the right to disclosure and legal advice.

If the agreement qualifies, then it will be enforceable provided it caters for financial needs. The intention is that the meaning of “financial needs” is clarified in guidance to be published by the Family Justice Council.

This will be relevant whether or not there is a nuptial agreement. The recommendation is that the guidance goes beyond words and provides figures which are likely to be within a range. Needs would include future needs for housing, childcare and income.

The Law Commission considered the question of clarifying “non matrimonial property” (pre marital property, or property received by gift or inheritance) but decided against it on the basis that it was too controversial.

Those who were concerned about ringfencing property could enter into a qualifying nuptial agreement.

It is yet to be seen whether the recommendations will actually reach the statute book given that family legislation can be controversial and the Government may not have the will to drive reforms through.

In the meantime, properly drafted nuptial agreements are given much greater regard than they have been in the past and are becoming increasingly common.

This article was written by Sarah Higgins.

For more information contact Sarah on +44 (0)20 7203 5012 or sarah.higgins@crsblaw.com