Matrimonial Needs, Property and Agreements – A New Approach
Law Commission’s Report on Matrimonial Needs, Property and Agreements
The much awaited Report has now been published and it includes a set of measures to make it easier for couples to manage their financial arrangements on divorce or at the end of a civil partnership. The measures are
- Guidance to help couples assess and agree financial needs,
- An assessment of the feasibility using formulae to help agree financial settlements and
- ‘Qualifying nuptial agreements’ to allow couples to decide how their assets should be shared if they separate.
The Report identified that there are regional differences to how the Courts approach orders for financial needs and this makes the outcome unpredictable.
The Law Commission recommends that there should be an authoritative guidance on financial needs which would enable couples to reach an agreement that recognises their financial obligations to each other.
The Law Commission also recommends that there should be a study into whether a workable non statutory formula could be produced that would give couples a clearer idea of the amounts that might need to be paid to meet needs.
Finally the Law Commission recommends the introduction of ‘qualifying nuptial agreements’. These agreements would enable married and civil partners to make a binding agreement regarding their property and finances and how they should be shared upon their divorce or dissolution. The agreements would be enforceable as contracts but only after both partners financial needs and any financial obligations towards children have been met. There must be financial disclosure at the time of signing and both have received legal advice for the agreement to be binding.
Currently pre or post nuptial agreements are considered by the Courts in any subsequent divorce or dissolution proceedings but they are not binding, in other words the Courts may not follow the terms agreed and may make different orders.
The Court will still have the ability to review the agreements and the financial needs of the children will remain the courts overriding consideration.
The Law Commission hopes that qualifying nuptial agreements will give couples greater autonomy to determine their financial arrangements themselves. This will mean the outcome upon a future separation is more predictable and less expensive. The requirement that it needs to meet the parties and the childrens needs will avoid unfair agreements.
The Report itself does not immediately change the law and so for now pre or post marital agreements are not on the face of it legally binding however if the recommendations are enacted into statute the qualifying nuptial agreements or QNA’s or QNups as they are referred to will become binding, providing the required safeguards have been met.
For advice on pre marital agreements please contact Amanda Weaver on 01788 555042 or firstname.lastname@example.org