Pre-Nups – Not Worth the Paper they are Written On?

While chalking my pool cue one evening last week, during a friendly team to team social night out, I was surprised to hear from one of my financial advisor colleagues the comment “my dad tells me that pre-nups aren’t worth the paper they are written on”.  Needless to say I then subjected the poor chap to a ten minute mini summary of how pre-nuptial agreements in Scotland are very much worth the paper they are written on and how we should make sure that none of his colleagues, contacts or friends are left with the same misconception.  After that lecture I suspect he won’t want to play pool with me again anytime soon!

On a serious note though it led me to thinking on my drive home how I have written many articles on the theme of pre-nups** that have appeared in the Herald and other publications and was invited to be a guest speaker on the topic on The Kaye Adams BBC Radio Scotland Show but in all those articles/discussions the focus has been on explaining what pre-nups do and why people should consider them. I hadn’t quite appreciated how widespread the misperception was amongst the population that pre-nuptial agreements aren’t worth having, not because they are only for the rich and famous but because they aren’t binding.

So for those who also hold that view let me explain a little more …

Pre-nups in Scotland

While pre-nuptial agreements have never been fully tested by the courts in Scotland there is a generally held view that if the agreement has been properly prepared and meets certain requirements that it will be upheld.  To prevent the agreement being set aside at a later stage:

1. It must be fair and reasonable that the time it is entered into;
2. Both parties must have had the opportunity (but not necessarily have taken) legal advice before signing; and
3. There must be no pressure placed on either party to sign.

Good practice dictates that the pre-nup should not be signed in close proximity to the marriage (as it increases the risk of an allegation that it was signed under pressure or duress), and that the legal advisor signs a certificate to say that full legal advice has been given, although this is not strictly speaking a requirement (in Scotland) or something which would invalidate the pre-nuptial agreement by itself.

In short therefore, a pre-nup properly prepared in Scotland by lawyers that meets the criteria above would be binding and shouldn’t be interfered with by a court.

Pre-nups in England

The English position is different to that in Scotland.  In England pre-nuptial agreements under certain circumstances will be given ‘decisive weight’ in any subsequent divorce action following the 2010 case of Radmacher –v- Garantino.  The law commission’s 2014 report included a draft Nuptial Agreement Bill which we have been waiting ever since to see whether it will progress through Parliament into legislation.  As yet it has not, but it provides very useful guidance on what would be required in a pre-nuptial agreement under the law commission’s recommendations for it to become legally binding in England summarised as:

1. The agreement must be contractually valid (enable to withstand challenge on the basis of undue influence or misrepresentation). It must be entered into freely and willingly by those parties.
2. The agreement must be made by deed and contain a statement signed by both parties that they understand it is enforceable and it will partially remove the court’s discretion to make financial orders.
3. The agreement must not have been made within 28 days immediately before the marriage or civil partnership.
4. Both parties must have received, at the time of making the agreement, disclosure of material information about the other party’s financial situation.
5. Both parties must have received legal advice at the time the agreement was formed.
6. The terms of the agreement must not prejudice the responsible and quite reasonable requirements of the children.

The requirements in England, therefore, on the face of it seem more onerous than those that have been in place in Scotland for some time. More commonly now, we see couples who are likely to live in more than one jurisdiction so it is important for anyone considering having a pre- nup who may live in England at any point to make sure that their pre-nup meets both the Scottish and English requirements.

The latest figures from the Office for National Statistics show that in 2021, 113,505 divorces were granted in England and Wales, a 9.6% increase compared with 2020.  The most recent Scottish government statistics reveal that 7379 divorces were granted in 2018-19, an increase of 7.5 per cent compared to 2017-18 when 6873 divorces took place. With the cost of an acrimonious divorce more than most people can afford it is little wonder then that according to a survey by investment platform Hargreaves Lansdown, one in ten people said they wished they had a prenup agreement before they got married.

The Herald- Why pre-nups aren’t only for the rich and famous

https://www.heraldscotland.com/business_hq/17816120.denise-laverty-pre-nups-arent-rich-famous/

The Scotsman- Will silver splitters fuel a rise in the number of pre-nups? 

https://www.scotsman.com/news/opinion/columnists/will-silver-splitters-fuel-a-rise-in-the-number-of-pre-nups-denise-laverty-3251578

The bank of mum and dad – to loan or to gift and other considerations?

https://www.linkedin.com/pulse/bank-mum-dad-loan-gift-other-considerations-denise-laverty-1c

If you would like further information regarding the topic discussed in this blog, please contact Denise Laverty by email – dlaverty@gilsongray.co.uk, or telephone 0141 530 2021.

You can also visit our Family Law Team page for more information here

The information and opinions contained this blog are for information only.  They are not intended to constitute advice and should not be relied upon or considered as a replacement for advice.  Before acting on any information contained in this blog, please seek solicitor’s advice from Gilson Gray.