Pre-nups on the up

The past year has seen a significant rise in the number of pre-nuptial agreements, reflecting the fact that couples of all levels of wealth are realising they can take a positive step in a relationship.

We dealt with 51 per cent more instructions for pre-nuptial agreements in the last quarter of the financial year for 2013/14 and that popularity is continuing to rise. The increase reflects the trend for more people embarking on second or third marriages. Getting married later in life, they are likely to have more assets to protect.

The rise in enquiries comes just months after the Law Commission outlined proposals to reform the law to uphold pre-nups in the vast majority
of cases.

There was previously some uncertainty around pre-nups and there was potential for the courts to overrule them too easily. The proposed amendments to the law would give them more weight as long as they were produced to a certain criteria. Only in exceptional circumstances where this criterion is not met will the courts decide not to uphold them.

Unromantic or pragmatic?

As well as the increase in the number of older people getting married, there are several other reasons for the rise in pre-nups including:

n the stigma of pre-nups being unromantic is gradually being eroded;

n steps to give pre-nups more weight by the courts moving forward;

n and the rise in pre-nup popularity among celebrity couples.

Whereas in the past, the thought of a pre-nuptial agreement has generally been seen as unromantic, the rise in instructions we have seen suggest that opinions are changing and they are being seen as a positive way to avoid lengthy court battles in the event of a separation.

The latest figures show that 42 per cent of marriages end in divorce so it is no surprise that many couples are now planning for a potential split just in case. We are seeing that pre-nups are becoming much more popular, particularly between partners that have built up sizeable assets, before they have met, which they want to protect.

The 65 to 69 age group has seen the biggest percentage increase in the number of marriages over recent years, often being second or third marriages. With children and homes already, a couple getting married later in life may want to protect their families' inheritance as they realise that there is a chance that the marriage might not work out.

But it must also be said that pre-nups are not just the reserve of the wealthy. A young couple tying the knot, perhaps each owning a starter home might equally want to protect those assets in the event of their marriage ending.

Debunking the myth

It is a common myth that pre-nups are there for one person to try to ensure that their partner gets nothing after a divorce, but this is not the situation and for pre-nups to be considered by the courts, they cannot provide for an unfair outcome, and both parties need to be involved in the process.

Although it is possible to have an amicable divorce, it is all too common for couples to end up in dispute. A great deal of the acrimony associated with divorce flows from trying to agree financial arrangements.

The financial consequences of divorce can often feel uncertain and overwhelming, especially if there are children involved. The legal framework in England and Wales allows the courts to take into account all the factors in a marriage and apply a great deal of discretion when determining a fair financial solution. While that allows the court to reach bespoke solutions, it can make outcomes difficult to predict.

Many people, including those who have been married before, have children, or are already financially secure in their lives, understand that a pre-nup can help provide some certainty about what may happen in the future and can empower a couple to decide for themselves how they will manage their financial affairs.

Although not yet automatically binding, a pre-nup can provide a greater level of protection to assets, should anything go wrong. Importantly, many couples see it is as a commitment that in the event of a separation further down the line, they will deal with the situation amicably and constructively. SJ

Sarah Balfour is an associate solicitor in the family law team at Irwin Mitchell