Pre-marital agreements (pre-nups) have been in the news a great deal recently. In February the Law Commission published a report supporting their role, recommending a change in the law so that they could become binding. However, there have also been a number of high profile court cases in which the courts have overruled pre-nups. So, what to believe?

The most recent court decision on pre-nups involved Victoria Luckwell, whose father created the company which gave the world Bob the Builder.  

Miss Luckwell had a pre-nup which was designed to protect property she had inherited from her father. But, the court overruled the agreement because it would have left her husband with no assets at all.  

However, the fact that they had entered into an agreement still had a profound effect on the terms of the settlement and her husband received substantially less than he would have otherwise.

The case was very bitter and shows how difficult it can be to predict he the precise outcome where the court considers a pre-nup to be unfair. In our experience it is often preferable to have an agreement which provides for needs to be met as that is more likely to be upheld in its entirety by the court.

Since Miss Luckwell's case the Law Commission has published a report on pre-nups. The report recommends a change in the law so that properly entered into pre-nups would be binding contracts, called Qualifying Nuptial Agreements.  

For such agreements to be binding, they would need to meet certain safeguards and crucially provide for the basic needs of the parties. If they did not, although they might still be influential, the court would still have the power to overrule them.  

It remains to be seen whether this or a subsequent government adopts the Law Commission's proposals but, even if they do not, the courts are still likely to take them into account.

Whilst hardly romantic and not for everyone, pre-nups are undoubtedly something to consider if seeking to regulate what would happen in the event of a divorce.  

In particular, we have seen interest in pre-nups from the following groups of people:

  • Couples who want to protect assets for their children from a previous relationship
  • The children of parents who would like to pass on assets for future generations
  • Those with specific inherited or family assets
  • Those with international connections

Increasingly we are being asked to advised on pre-nups as part of a wider estate-planning exercise and the Law Commission's proposals suggest that this will only become more commonplace.