With more people divorcing later in life and contemplating remarriage/civil partnerships, the news that a recent Law Commission report recommends “qualifying” pre-marital agreements (QPMA) should become enforceable through proposed legislation is to be welcomed. If its recommendations are followed, this should provide clarity and confidence to people contemplating such agreements which have remained to a certain extent, controversial.
Importantly a QPMA could potentially remove the uncertainty of what constitutes “matrimonial property” to be divided on divorce – an issue which may be complex and expensive to resolve without a QPMA. This is crucial where one or both parties wish to protect, for example, both their pre (and post marriage) accrued capital, property, and business interests from a claim by the other on divorce, thus preserving assets for their children from a previous relationship.
Apart from “ring fencing” assets in case of divorce, a QPMA may also set out how the couple has agreed to organise their finances and property during their marriage, eg the payment of bills, regulation of current and savings accounts etc.
For those nervous about being tied into a QPMA, especially younger couples, it is important to note the court would still retain the power to review agreements should they attempt to avoid future consideration of individuals’ financial needs – in particular those of any children.
To qualify as a QPMA the Commission suggests that; it should be made at least 28 days before marriage; there must be disclosure of material financial information by both parties; and since a QPMA would oust the court’s usual power to make financial orders in divorce, both the parties should each take advice from a different solicitor before entering a QPMA, not only as to its significance and effect but also about what financial remedies may have been open to them otherwise, so an informed decision process can take place without undue influence of one party by the other.
Meanwhile it is to be remembered that Pre-marital agreements are recognised by the courts already and likely to be enforced by the courts should they have been drafted properly, subject to certain safeguards, so there is still every reason to enter into one should you wish to create more certainly about a settlement should your marriage sadly come to an end.
Please contact Ringrose Law Family team should you wish to enter into or need further clarification on this article