Regulation  

Law Commission’s prenup plans will have ‘huge impact’

The partner for City law firm Withers said the measures from the Law Commission to make prenups legally binding would, if implemented, have a “huge impact” on marriages among wealthy people in England and Wales.

She said it should certainly help those whose inherited trusts and estates may otherwise fall into dispute, should it be implemented.

Ms Blakemore said: “Individuals with pre-acquired wealth or inherited assets will welcome the recommendation by the Law Commission that parties should be able to enter into binding nuptial agreements if ‘needs’ are met.

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“However following this report the focus will inevitably now turn to what constitutes ‘needs’ – historically an elastic concept in the family courts. Will couples be able to enter binding prenups in which provision for ‘needs’ is lower than a court would award had they not entered into the prenup?”

Her comments came as the Law Commission unveiled its 221-page Matrimonial Property, Needs and Agreements Project, which it submitted to the House of Commons on 26 February.

The project report said: “For the majority of couples going through divorce and dissolution, meeting what are referred to by statute and the courts as ‘financial needs’ is, after providing for their children, the only financial issue.

“The ending of their partnership will inevitably mean that they will cease to share a home and – in many cases – an income and pension arrangements. A new start has to be made.”

Key proposals

■ The Family Justice Council prepares guidance as to the meaning of financial needs, encouraging the courts to make orders that will enable the parties to make a transition to independence.

■ Qualifying nuptial agreements should be introduced by legislation.

■ It shall not be possible to use a qualifying nuptial agreement to contract out of provision for financial needs.

Adviser view

Corinne Parke, co-founder of newly launched London-based advisory firm Finances4Divorce, said: “The recommendation from the Law Commission that, upon satisfaction of certain conditions, a court should find the prenuptial agreement binding upon the parties will encourage clients to consider safeguarding those assets and the needs of both parties at any early stage. This potentially, at the point of separation or divorce, avoids excessive litigation and provides certainty for all involved.”