Pre-nups could become legally binding
Pre-nuptial agreements could become legally binding, following a legal review by the Law Commission.
The UK’s legal system has previously resisted allowing these "marriage contracts" to become legally binding. Currently, the courts can only use these contracts as guidance for divorcing couples.
Popular in the United States and amongst the super-rich, a pre-nuptial agreement is a contract entered into between two people before marriage, and includes provisions for the division of assets should they ever get divorced.
The Law Commission, appointed by parliament to review British laws, is currently reviewing a raft of legislation, including the intestacy laws - when people die without leaving a will - as well as pre-nups.
Sir Terence Etherton, a high court judge and the Law Commission's chairman, said: “There is a recognition that the division of assets is an issue of considerable social importance, and there is wide dissatisfaction with the current law. But we recognise that the issue is increasingly politicised and controversial.”
The Law Commission says that if pre-nups are to become legally binding then this will also apply retrospectively.
According to a recent survey by accountants Grant Thornton, the proportion of lawyers who believe pre-nuptial agreements should be legally binding has risen from 37% to 56%.
Julia Whittle at Punter Southall Financial Management, says legally binding pre-nuptial agreements would be beneficial in certain cases. “If you were entering into a second marriage with a lot of assets for example, or have children that you want those assets to go to, pre-nuptial agreements can be very useful,” she says..
However, Whittle warns that these agreements are complicated to draw up and have the potential to make a divorce settlement more expensive. “If you are considering drawing one up, make sure it is used to protect both parties – particularly if you are unlikely to be the higher earner.”
The Law Commission hopes to produce a draft Parliamentary Bill on pre-nuptial agreements by 2012, and will also consider whether agreements made after marriage should be enforced in the courts.