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'We believe that married couples and civil partners should have the power to decide their own financial arrangements, but should not be able to contract out of their responsibilities for each other's financial needs, or for their children. The measures we are recommending would help couples understand and meet their financial responsibilities and, where appropriate, achieve financial independence.The Law Commission's report, Matrimonial Property Needs and Agreements, includes a draft Bill that, if implemented, would bring qualifying nuptial agreements into effect.
Pre- and post-nuptial agreements are becoming more commonplace but the courts will not always follow them and lawyers are therefore not able to give clear advice about their effect. Qualifying nuptial agreements would give couples autonomy and control, and make the financial outcome of separation more predictable. We have built in safeguards to ensure that they cannot be used to impose hardship on either party, nor to escape responsibility for children or to burden the state.'
'Since the landmark ruling in Radmacher v Granatino in 2010, pre-nups have, in effect, been made legally binding, yet it is only when they are tested in court that this becomes clear. This latest development seeks to enshrine the status of pre-nups in legislation, which we welcome, and should give people confidence that marital agreements will be upheld. This should also help reduce the burden on the courts.Alison Hawes, a specialist family and divorce lawyer at Irwin Mitchell said:
We don't expect this measure to lead to every engaged couple in the country seeking a pre-nup, but for those couples who want to have one in place, it will make their legal situation much clearer and reduce uncertainty upon separation.
It's also important to note that the court will still have the ability to review agreements in so far as they deal with people's financial needs.
Individuals' financial needs - in particular those of any children - are still the overriding consideration, and couples will not be able to make binding agreements which allow them to avoid future consideration of financial needs.
There is, therefore, a risk that we could end up with a two-tier arrangement, where one type of agreement is legally binding, and others still open to challenge - couples need to be aware of this, and that's why the recommendation that people are required to seek legal advice is so important.
We would prefer to see change which would open up binding pre-nups to a wider group of people, with appropriate safeguards. Nevertheless, we welcome the fact that this will allow some couples to create certainty about their financial settlements should their marriage sadly come to an end.'
'This report provides clarity after years of uncertainty and will turn case law (Radmacher v Granatino in 2010) into law, as well as changing the emphasis so that the court has no power to interfere if the agreement "qualifies".The full report can be downloaded here; it includes a draft Bill and is accompanied by an Executive Summary, an Impact Assessment and the responses to both consultations.
Qualifying pre-nuptial agreements will give couples greater autonomy to determine the financial outcome in the event of a future separation. The outcome of a future separation will be more predictable and less expensive. The proviso that it needs to meet the parties and children's needs will avoid unfair agreements. This approach to pre-nuptial agreements is more in line with how they are treated in the rest of Europe.
This long-overdue decision to make pre-nups legally binding under the right circumstances will bring clarity to how these agreements are dealt with in the courts and provide couples with more certainty over the whole process.'
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