A pre-nuptial agreement is an agreement entered into before a marriage setting out financial arrangements between a husband and wife in the event of the breakdown of their marriage. Every pre-nuptial agreement is different reflecting as it does a couple’s circumstances, but would generally include provision for the division of property and maintenance or aliment from one spouse to the other.
In Scotland it is arguable that pre-nuptial agreements (also known as “pre-nups”) are legally binding in the same way as any other contract entered into between parties. However, the question has not yet been definitively considered by the Scottish courts.
The position differs in England however where it was previously thought that only the court and not the parties had the authority to determine financial orders on divorce. This view has now changed and guidance provided in the recent Supreme Court case of Radmacher v Granatino 2010 UK SC 42. In this case the Supreme Court ruled that prenuptial agreements should have “decisive weight” in English Divorce Courts. The court will “infer that parties entering into agreements will intend that legal effect should be given to them on divorce”. The Radmacher case is consistent with what many Scottish lawyers believe the law to be north of the border. In other words if you make an agreement freely and in good faith then you will likely be held bound by that agreement.
The uncertainty over the law in Scotland has not been resolved by the case of Radmacher and it is hoped that further clarity will be provided once the Law Commission has investigated this area of the law and issued its Report which is expected in 2012.
Careful consideration should therefore be given to entering a prenuptial agreement especially for those seeking to protect assets or income upon divorce. Both parties should always seek legal advice independent of one another and there must be no suggestion of one spouse being pressurised into signing an agreement.
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