Pre – Nuptial Agreements are essentially contracts entered into by a couple prior to the marriage taking place, which set out how assets will be divided between both parties in the event of a divorce. Whilst such agreements are not legally binding, case law assists in them being upheld by the courts when entered into freely and with full understanding as well as meeting the following requirements:
- The provisions of the agreement must be fair and reasonable and meet the needs of any children.
- There must be full financial disclosure of assets, liabilities and debts.
- Each party must have had independent legal advice.
- Full understanding of the effect of a PNA.
- The prenuptial agreement must be signed by both parties at least 28 days before marriage.
The recent case of AH v BH [2024] will understandably raise some questions on the stance of PNA’s. In this case, the agreement was not upheld, and deviated from the position that the courts usually hold.
In this case, the court was faced with a dispute over finances after a 5-year marriage came to an end. There were substantial financial assets (to the value of approximately £50 million) however, the PNA severely limited the Wife’s entitlement claims. The court was faced with the difficulty of balancing the agreed terms of the PNA, with the needs of the wife and the parties two young children.
While the court did acknowledge that the agreement was indeed fair at the time of it being agreed, they also recognised that it would not meet the Wife’s and children’s needs. The PNA also did not account for the sacrifices made by the wife during the marriage, in terms of ending her career early and the sale of her own property. A review clause had also been added into the agreement, stating that it should be reviewed on the birth of their first child, however, the judge noted that this had not been the case. This clause acknowledged that the fairness of the PNA would likely change if there were children’s needs to be met. The courts found in favour of the wife as this was required to reach a fair outcome for herself and her children. This case also highlights the importance of having a PNA, especially where there is a financially stronger party, as in this case, the Wife was awarded less than what she would have received had there been no agreement in place.
So, will your PNA be upheld? In short, the answer is probably yes. As long as it meets the necessary requirements for all PNA’s, there is no reason for the court to override it. The key information to take from the recent judgement in AH v BH is that PNA’s should be regularly reviewed, especially when there has been a significant change in circumstances such as the birth or adoption of a child, or the parties inability to work for medical reasons (in excess of 6 months).
If you would like to discuss a Pre – Nuptial Agreement please do not hesitate to get in touch with us.
