February 28, 2014

Why proposed new pre-nup laws are only for the wealthy

By Fiona Kendall

A long awaited Law Commission announcement which is recommending a special status pre-nuptial agreement is unlikely to have any relevance whatsoever for most people earning average incomes.

I was invited onto Martin Kelner’s  BBC Radio Leeds show to discuss the proposed draft bill which, if implemented, would introduce legally recognised ‘qualifying nuptial agreements’ (QNAs) – which mean a couple can establish how finances can be shared should they split up. Under current law, pre-nups are not legally binding and can be overturned by the courts.

As I explained to Martin’s listeners, while I welcome the recommendations, I believe that the suggested changes would benefit primarily the very wealthy. The proposed changes are less relevant to the average person with limited finances and assets. Even if they draw up a ‘qualifying nuptial agreement’ spelling out how their property and/or finances should be shared if they divorce, the proposal is that courts could still overrule this agreement to the extent that it does not meet the financial needs of one party.

For people with considerable wealth there is no doubt that a QNA would give them more certainty about how the rest of their financial assets are split – and, as some media commentators have pointed out, could protect wealthy individuals against so called ‘gold diggers’.

The announcement may be a ‘vote catcher’ only for the very rich and the jury’s still out as to whether MPs will drive it onto the statute book during this Parliament.

In the meantime existing pre-nups are useful for couples of relatively modest means who want to help protect their assets should their marriage fail.  A well-drawn up agreement, backed up with sound legal advice and which takes into account both party’s future needs, will remain one of the factors to be considered in a divorce court when assessing what constitutes a fair settlement.

If you have any questions about the Law Commission’s proposals, or about pre-nups generally, please call us on 0113 246 0055, leave us a comment below or drop us an e-mail.

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