Family Law Blog

Qualifying Nuptial Agreements

20 February 2014, by Taylor King Family Law Solicitors

The Law Commission for England and Wales has just published its report on Matrimonial Property, Needs and Agreements. The report recommends the introduction of binding nuptial agreements, to be known as qualifying nuptial agreements (QNA).

QNAs can include the increasingly popular pre-nuptial agreement and the less common post-nuptial agreement. Both intend to regulate the financial consequences of separation and divorce (or dissolution of a civil partnership) before such event has occurred.

In the well publicised case of Radmacher v Granatino in 2010 the Supreme Court said that, provided each person had a full appreciation of the implications of the agreement, the court should give effect to nuptial agreements unless it was not in the interests of fairness.

The Law Commission Report takes the view that legislation should be introduced with regard to prenuptial agreements.

The Law Commission has, however, recommended that ‘needs’ will have to be safeguarded so couples entering into a QNA will not be able to contract out of meeting each other’s financial needs on separation and divorce.

The courts are taking the same stance as in the recent case of Luckwell v Limata [2014] EWHC 502 (Fam) the judge said that “very great weight should be given to the agreements in the absence of any vitiating factors”. However, the weakness or unfairness in this case was that the agreement provided the husband with nothing no matter how long the marriage or how great his needs upon the breakdown of the marriage. The husband was in real need and the judge held that some capital provision must be made on the basis of needs.

Of course ‘needs’ is a broad concept covering capital provision as well as income over the long term and short term. In practice the objective is to enable each spouse to make the transition to independence taking into account the length of the marriage and choices made within it, ongoing shared responsibilities (i.e. children), the need for a home and the standard of living enjoyed during the marriage. The Law Commission has concluded that the provision of guidance on meeting financial needs is necessary.

For couples wishing to enter into a QNA the Law Commission has recommended that they will only qualify if certain formal requirements are met:

  1. The agreement must be contractually valid and enforceable.
  2. The agreement must be made by deed.
  3. It must contain a statement signed by each party that he or she understands that the QNA will restrict the court’s discretion to make financial orders.
  4. The agreement must not be made during the 28 days ending with the day on which the marriage or civil partnership is formed.
  5. At the time the agreement is formed both parties must have received:
    1. Disclosure of material information about the other party’s finances; and
    2. Independent legal advice (the provision of a statement signed by each party and their lawyer confirming that such advice has been provided will create a presumption that this requirement has been met)