28 Feb 2014

A new angle on pre-nuptial agreements

BKL Briefing, Insights, Publications

Divorce can be messy. And expensive. But the Law Commission in England and Wales has recently announced proposals that would see pre- and post-nuptial agreements becoming legally binding; which would make management of financial arrangements on marriage breakdown much less fraught. At present, married couples (and civil partners) can agree at any time how assets will be split in the event of marriage (or civil partnership) breakdown; but such agreements are not legally enforceable.

Understandably, many young couples may be reluctant to sully the brightness of their new marriage with thoughts of grubby lucre: “What – do you only love me for my money?” Parents, however, may have other less sentimental and more practical views.

One aspect of pre- and post-nuptial agreements which may bear further thought is therefore in reference to wills. Wills, that is, of parents and grandparents rather than of the parties to the marriage. In future, it may be possible for bequests to married descendants to be made conditional on a pre- or post-nuptial agreement being already in place or on a post-nuptial one being put into place within a specified period. While a pre-nup may be emotionally difficult, it may be much easier for already-married parties to say “Darling, I don’t want to do a post-nup any more than you do: but look – if we don’t, Uncle Fred’s £1m goes to the Cats’ Home.”

Interesting issues arise including public policy considerations and what alternatives the will should provide for if the descendants decline to effect a post-nup; and of course the concept depends upon the Law Commission proposals passing into law. But we think that “forced pre-nups” are likely at some point to take their place as a standard tool in estate planning.

For more on this, please get in touch with your usual BKL contact or use our enquiry form.