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Pre-marriage agreements – are they binding?

Historically, the courts have jealously guarded their powers to order financial provision upon divorce. Set against this is the legitimate desire of some couples to agree prior to a marriage how their financial resources are to be treated in the event that the marriage breaks down.

 

Whilst pre-marriage agreements do not bind the court, recent decisions show that the court will refer to a pre-marriage agreement and will put it into effect unless it would be unfair to do so.

 

What is fair? An agreement may make provision which may differ from what a court would consider fair or would order if an agreement hadn’t been entered into. Nevertheless, within reason the court will respect the parties’ wish to arrange their own affairs.

 

The court will want to see that each party has had the opportunity of obtaining independent legal advice and has been provided with all the relevant financial information and understand the effect of the agreement.

 

The court will also look at the circumstances before it at the time the matter comes before it for a decision. Has there been a fundamental change in the circumstances that existed when the parties entered into the agreement? Did they intend the agreement to cover the situation which now exists?

 

The court still retains the final decision when considering the appropriate financial arrangements for the couple and any children. However, the court’s approach now appears to be that where the couple have entered into an agreement without undue pressure and with a full understanding of the facts and effect, it will hold the parties to their agreement.

 

Sometimes the parties enter into an agreement after the marriage has taken place. Historically the courts have given weight to these agreements because there is less obvious pressure to enter into an agreement. In other words, it is not a case of “sign or you will not see me at the altar”. Furthermore, post marriage agreements are valid and binding upon the parties to the extent that they do not exclude the power of the court to order financial provision upon divorce. The court retains the power to vary the terms of the agreement, particularly where the circumstances envisaged by the parties when they entered into the agreement have fundamentally changed.

 

A pre-marriage or post marriage agreement may avoid acrimonious arguments upon the breakdown of a marriage. However, it is important to remember that whilst the courts seem much more ready to uphold the agreements, they are still not binding in law.