Pre and post-nuptial agreements – the trends identified
Family lawyers across England and Wales have reported an increase in the number of people seeking advice and entering into pre-nuptial agreements.
Family lawyers across England and Wales have reported an increase in the number of people seeking advice and entering into pre-nuptial agreements since the Supreme Court heard the case of Radmacher v Granatino in 2010, which found that pre-nuptial agreements should be given decisive weight in divorce proceedings.
Weightmans’ national family law team has analysed the work that it has undertaken between 2014 and 2017 for clients seeking to enter into pre and post-nuptial agreements to see if we can identify any trends.
The growing popularity of pre-nups in the UK
As entering into a prenuptial agreement is a highly confidential and personal decision, it is impossible to accurately gauge the volume of agreements being signed in the UK. They will often contain strict confidentiality clauses preventing the contents of the agreement being disclosed without the other person’s permission.
Our analysis shows:
Since 2014, the number of pre-nuptial agreements that we have worked on has increased by 300%.
Who tends to use them?
Pre-nuptial agreements are typically associated with celebrities and the super wealthy, but the reality is quite different. They are growing in popularity with entrepreneurs, people with shares in a limited company, or those with a stake in a family business.
Further, people who have received an inheritance (be it large or small) may feel that this money should be considered as separate to matrimonial assets. Equally, they may wish to separate assets that they have introduced into the relationship over and above those of their partner.
Occasionally, the motivating factor is the protection of future shareholdings or a future windfall, or the need to ensure that children from a first marriage do not lose out on their inheritance as a result of a divorce.
Reasons for pre or post-nuptial agreement
Our analysis shows the rationale behind the agreements we have worked on as follows:
- Protecting wealth acquired prior to the relationship (self generated/business or inherited) – 77% of our cases
- Protecting current and future businesses – 45% of our cases
- Protecting inherited assets/family trusts or future inheritance – 35% of our cases
- Second marriages (with or without children) – 30% of our cases
- (and of those second marriages with children from first marriage – 80%)
Are pre-nups more common with international families?
Not necessarily. Only 22% of our cases involved one or both spouses living abroad.
Aren’t they always London-based?
A common misconception is also that pre-nups tend to be dealt with in London, by London lawyers, for London or internationally based clients. Our analysis shows that 61% of our cases involved clients who did not fall within those parameters. They regularly involve regionally based clients outside of London.
How should a couple discuss a pre-nup – particularly if it is not something that either of them really wants?
Our analysis shows that almost 20% of our cases arose as a result of a parent or trustee insisting that their child or the beneficiary of a Trust enters into a pre-nuptial agreement to preserve wealth previously acquired by that family or Trust.
Often the requirement only comes to light after parties are engaged, and it can be a testing time for all concerned. Questions may arise during discussions that the couple may not have even considered. It is recommended that they are open and honest with each other about the outcomes they fear and what they can agree is fair.
A pre-nuptial agreement can only be entered into with both parties’ agreement, so it is important that they are both fully involved in the discussions rather than leaving it entirely to lawyers – or to their parents.
Are pre and post-nups legally enforceable?
They are not 100% binding as this would require a change in the law/statute, but they are very likely to be upheld if the agreement meets the criteria that it was entered into freely, with both parties fully appreciating the implications of the agreement, and it is fair to hold the parties to the agreement in the prevailing circumstances at the point of the divorce.