There has been a lot of interest in recent years over the impact of pre-nuptial or separation agreements on financial divorce settlements approved by the family court. Most people are aware that an agreement made by the parties is not binding on the court. However if a proper process is followed, i.e. there is a full exchange of the parties financial disclosure, both parties obtain independent legal advice, the agreement is fair according to the parties income, capital and pension’s needs, and the parties are in similar health to when the agreement was made, it is likely that the agreement will influence the financial settlement on divorce.
The recent case of Luckwell v Linata (2014) EWHC illustrates this. However, the agreement was not fully upheld as it did not provide the husband with capital funds to purchase a property when he required suitable accommodation to have their children stay over for contact. £900,000 was allocated to him to obtain accommodation which he could use, yet not own for the purpose of the children staying with him. After the children attained the age of 22 it was ordered that the property should be sold and he should receive 55% of the sale proceeds to purchase a smaller house.
Mr Justice Holman concluded that the decision and judgment was based entirely on the needs of the husband and considered in conjunction with his role as his father. Had he not had the pre-nuptial agreement he would have given the husband a larger housing fund – all of that property. This case highlighted the importance of ensuring that the pre-nuptial agreement is fair according to current and future needs i.e. particularly in the event of the parties having children and both parties requiring accommodation. Substantial costs were no doubt spent by both parties in the matter ending up in court.
Within our family department, our senior family lawyers are able to assist in preparing and advising on the terms of a pre-nuptial agreements. We are also able to offer a competitive fixed fee.
For further details and advice on Pre-nuptial and Separation Agreements contact Sally Corrigan at our Sleaford office 01529 301300 or one of our other offices in Boston, Lincoln, Grantham, Spalding and Newark.