Law reform body recommends introduction of financial needs guidance and binding prenuptial agreements
The Law Commission has in a recent report on finances and divorce produced today the 27th February 2014 recommended wide-ranging proposals that would also see pre-nuptial agreements become binding in English law.
The commission's report, 'Matrimonial property, needs and agreements', in a key recommendation, recommends that prenuptials should become binding subject to certain safeguards. In addition the report recommends that when considering division of a couples assets the meaning of 'financial needs' should be clarified in Family Justice Council guidance to ensure that the term is applied consistently by the courts throughout the country therefore avoiding regional variations and provides assistance to litigants in person .
The report also recommends looking into the possibility of introducing formulas allowing couples to calculate their financial liability a process which is used in certain other jurisdictions such as Canada.
Under the proposals prenuptial agreements would only be binding if they met certain conditions and only after both partners' financial needs, and any financial responsibilities towards the children, have been met. This would in many circumstances however allow couple to confirm their own financial arrangements prior to marrying and deal with many problems which arise especially where there has been inherited property on where there are second marriages.
At present, the courts will only consider the effectiveness of prenuptial agreements in circumstances where they are satisfied that the parties have entered into them willingly and after receiving independent legal advice, but there is no guarantee that they will be upheld.
Under the new proposals there will be built in safeguards to endure that they cannot be used to impose hardship on either party, nor escape responsibility for children or to burden the state."
Prenuptials would be binding if there has been no undue influence, the parties have received independent legal advice, have been signed at least 28 days before the wedding, and that there has been full disclosure.
A draft bill is attached to the recommendations in the report. Whether however the recommendation will become law will depend on the government timetable and the motivation to bring in the changes.
The link to the recommendation ishttp://lawcommission.justice.gov.uk/publications/matrimonial-property.htm
Phil ThorneycroftPartner at Wolferstans specialising in divorce and finance settlements
Tel: 01752 292310