The Value of Prenuptial Agreements

prenup The last thing you want to think about before getting married is what happens when you get divorced. However, with two out of five marriages ending in divorce, it is often necessary to look past your optimism and to make sure that if things didn't work out, there is a plan in place for you both to amicably part ways.

Traditionally courts in England and Wales have treated prenuptial agreements with hostility. However, following the Supreme Court judgement in Radmacher v Granatino [2010] UKSC 42 this position began to change. The Supreme Court held that courts should give appropriate weight to terms of a pre-nuptial agreement if:

  • each party freely entered into the agreement;
  • both parties wholly understood the implications of the agreement when it was entered into;
  • it would be fair in the circumstances of the case to uphold the agreement.

The Law Commission (the independent body responsible for law reform recommendations to the government) then took this change one step further with a draft of the Nuptial Agreements Bill and a report on ‘Matrimonial Property, Needs and Agreements’. In the report, they suggested the creation of “qualifying nuptial agreements” which would make prenuptial agreements that are in a specified form and follow certain safeguards, legally binding. Such a reform would therefore reduce the court’s power to make financial orders upon divorce where a valid pre-nuptial agreement is in place.

Who may benefit from a pre-nuptial agreement?

It is a common misconception that prenuptial agreements only benefit wealthy individuals. However, the Law Commission reports highlights the various examples of when a prenuptial agreement benefits the wider population:

  • Couples able to meet their own needs independently;
  • Where one party to a couple has specific assets to protect such as inherited wealth/business assets
  • Couples who have children from a previous relationship/marriage i.e. to ensure property is passed to those children;
  • Where a party anticipates acquiring wealth after marriage; or
  • Overseas couples from place where pre-nuptial agreements are commonplace.


Benefits of pre-nuptial agreements

Less stress
  • Divorces are often complicated and sometimes hostile. By agreeing from the beginning of the marriage exactly how their finances will be shared if they do separate, divorce or dissolute, couples can avoid the typical conflicts, litigation and subsequent stress that comes from it.


  • A prerequisite to a pre-nuptial agreement is disclosure of financial information of all assets and income. Couple’s are therefore made aware of each other’s financial position from the outset of the marriage


Compensation for loss of career
  • As often is the case, where one party gives up their career to care for the family, it can be agreed that that person is entitled to a greater share of assets upon breakdown of the marriage/civil partnership to reflect loss of earning power.
  • Without a pre-nuptial agreement explicitly stating this “compensation” be provided, it is unlikely the court would award it


Potential to save money
  • Drafting a pre-nuptial agreement is usually significantly less expensive than having to litigate about the distribution of a couple’s finances following a divorce.


Protection of assets
  • A pre-nuptial agreement may be valuable if a party wishes to “ring-fence” certain assets. E.g. inherited properties or family heirlooms.
  • If a pre-nuptial agreement specifically “ring-fences” certain properties, the court is unlikely to award a share in that property upon divorce.
  • If either party has children from a previous relationship, a prenuptial agreement can also protect any of the children’s financial assets by “ring-fencing” assets in the agreement.


Debt protection
  • If either party has significant debts or gains significant debts in the future, a prenuptial agreement can protect the other party’s assets from being used to satisfy those debts.


Protection of business partners
  •  Prenuptial agreements can protect any interest a party may have in respect of a small/family private business thus preventing disruption to the business if the marriage/civil partnership were to breakdown

Although qualifying nuptial agreements have not yet been implemented as law, the government’s final response to the Law Commission’s recommendations is expected sometime in the near future. It is expected that in the near future greater weight will be placed on qualifying prenuptial agreements and they will subsequently become more popular.

However, for a qualifying nuptial agreement to be given weight it needs to be drafted in the proper format:

  • The financial needs of both the parties and children have been met
  • It must be validly executed as a deed
  • It must have been made more than 28 days before the wedding or civil partnership ceremony
  • Both parties to the agreement must have received financial disclosure of material information about the other party's financial situation when they entered into the agreement (the disclosure requirement).
  • Both parties must have received legal advice at the time they entered into the agreement (the advice requirement).

Whilst the above steps may seem an undesirable task the advantage is that in the event of your marriage failing your qualifying prenuptial agreement will act as a form of insurance for both parties. It can save huge divorce costs, bitter court battles and emotional distress.

If you are thinking about marriage and want to avoid unnecessary stress or want to protect your assets in the worse case scenario, contact our family law team by emailing us at or calling 0113 457 3500 and asking to speak to Shakeela Bi.