LEGAL
A house divided
Legal expert, Graham Dorman looks at ‘pre-nups’ in property joint-ownership
T
he Law Commission has published proposals for statutory recognition of pre-nups and what joint owners of property can do to protect themselves, should they ever need to part company. Married or not, couples planning to buy a home together often find themselves ill-prepared when their
relationship breaks down and assets such as real estate need to be divided. If the Law Commission proposals for giving pre-nuptial agreements a statutory basis holds sway, married couples fearing a worst-case scenario will be able to agree in advance how property would be divided, without a costly legal battle. However,
co-habiting couples and friends or siblings wishing to buy property together remain vulnerable – unless they take steps to protect their interests in some form of non-nuptial property pre-nup.
PRE-NUPTIAL AGREEMENTS Currently, marital property agreements (pre-nups) entered into by prospective spouses do not enjoy statutory enforceability and the determination of the rights and obligations of the parties arising out of such agreements is left to the courts to decide. This is an unsatisfactory regime so far as the parties are concerned, giving an element of doubt as to the division of assets freely decided upon by the parties prior to tying the knot. However, following the high-profile battle between German heiress Katrin Radmacher and her ex-husband in 2010, the UK Supreme Court found that a pre-nup can be legally binding. So, what is a pre-nup and is it something which
all intending married couples should be looking at, given how the Law Commissions proposals are likely to affect enforceability? Pre-nups are intended to protect the particular
assets of one or other of the intending spouses from the consequences of the division of marital property that otherwise might be the position should the marriage fail and divorce ensue. The assets which a party may wish to protect
could be pre-marital wealth, family, inherited or gifted assets.
14 APRIL 2011 PROPERTYdrum Pre-nups are not for everybody; the assets of the majority of
married couples facing marriage breakdown would not warrant such an agreement and, in the event of divorce, these couples will be more concerned with dividing the marital assets according to their needs. Pre-nups have traditionally been the concern of the more wealthy and often make headline news. However, with the significant increase in second marriages, producing children with split parentage, the need for agreeing in advance the division of, and entitlement to, assets is becoming ever more keenly felt. Pre-nups have not been the subject of statutory protection
largely as a result of moral concerns over the status and integrity of marriage. It has been considered that such agreements may devalue the wedding vows (“for richer, for poorer”) and perhaps encourage the parties to seek divorce. The Law Commission consultation could pave
Friends wishing to buy property
together remain
vulnerable unless they take steps to protect their
interests in some form of property pre-nup.’
the way to the legalisation of pre-nups, possibly with restrictions; agreements could be binding but subject to an overreaching role of the courts for approval. It is likely that only agreements that have been freely entered into and where both parties have given full disclosure of assets and received detailed legal advice would qualify for protection. It is also possible that only special assets may be subject to protection, eg inherited and gifted wealth and not, say, assets accrued during the course of a marriage. The Law Commission will also need to consider
the position of any children of the marriage and that of any spouse who may find him or herself reliant on state assistance due to the other taking away the protected assets.
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68