Something Old, New, Borrowed and Blue (… and don’t forget the Pre-Nup too!)

The decision in the recent case of MN v AN [2023] serves as a helpful and timely reminder of the factors considered when entering into a pre-nuptial agreement (also known as a pre-nup or PNA).

People are often surprised when they decide to look into obtaining such an agreement at the cost involved and requirements for them to be effective.

Under English law the Court must ensure PNAs are fair to all parties, and can intervene where an unfair outcome may arise from it.

The principle as set out in Radmacher v Granantino [2010], which confirmed that PNAs can be relied upon under English law still stands, and makes clear:

“The court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement“.

As such, in English law a PNA is never a guarantee. There are, however, steps that can be taken to give it the best possible chance of standing, which MN v AN has helpfully reiterated and which we would always advise be followed:

Requirements

1. Disclosure:

It is absolutely essential that both parties to a PNA go in with eyes wide open, knowing what they are giving up a potential claim on. This means clearly setting out bank account contents, savings, pension valuations, income sources and property assets, and ideally attaching this information to the agreement itself.

2. Timing:

A PNA should be signed no later than 28 days before the wedding day, but ideally it will be agreed and finalised long before this point. The other party needs time to consider the concept of a PNA in itself, and the terms being sought, as well as time to consider and review the final version before signing, and all of this takes time.

It should also be noted that a PNA which is put in a draw after signing and never looked at again is unlikely to be looked upon favourably, and careful thought should be given to regular review periods to check it remains fair, and to account for any change in circumstances (such as birth of  children).

3. Duress:

The PNA must be signed freely and willingly, without any undue pressure or duress. In particular, there should be no suggestion of a ‘sign this or we’re not getting married’ situation, as the social stigma of calling off the wedding on short notice (and the prospect of losing deposits when doing so) could leave the financially weaker party feeling they have no choice but to sign.

4. Legal advice:

Both parties should have legal advice on the terms of the agreement, and the opportunity to request or discuss any amendments they consider necessary in light of that advice. To evidence this, the solicitors acting for each party will usually attach a certificate to the agreement confirming both understood its terms and implications, and agreed to it in full awareness and intending to be bound by it.

I can absolutely assure you that the cost of taking advice on a draft PNA, or paying for the other party to do so, will be cheaper than the costs involved in arguing over it later is far outweighed by the risk in it’s absence undermining the entire agreement.

Court’s approach

MN v AN helpfully endorses a two-stage test when it comes time to bring the pre-nuptial agreement out and apply it:

1. Are there any circumstances surrounding the making of the PNA which should eliminate or reduce the weight to be attached to it? (see above)

2. Does the PNA operate fairly now, having regard to all section 25 factors and in particular the needs of any children of the family:

‘Section 25 factors’ are matters the Court must have regard to at all times when exercising their powers and assessing a ‘fair’ outcome, they refer to the factors outlined under Section 25 of the Matrimonial Causes Act.

It is therefore essential that a PNA sets out not only what a party will not be entitled to upon divorce, but equally what they will be provided and/or left with. It is not enough to simply say they will leave with nothing, if that ‘nothing’ will not meet their reasonable needs.

MN v AN is an example of a PNA being upheld as fair and reasonable, and it is clear from the judgment why – the agreement was discussed at length, both parties had high-quality legal advice, there was ample time to consider and negotiate the terms, and the provision it left the parties with was considered fair in all circumstances.

While the case does sadly illustrate that issues which can arise in putting a PNA in place (the judgment refers at one point to ‘the mother of all arguments’ where the word ‘gold digger’ was used), it is also an example of how to properly approach the process of preparing and signing an agreement in advance of marriage.

For advice and assistance in preparing a pre-nuptial agreement, please contact our trusted Family law solicitors at our Darlington or Northallerton offices.