Skip to main content

Fairness vs. Finance: The Prenup Dilemma

While prenuptial agreements (or “prenups”) are not automatically legally binding, the Court will give weight to them if certain safeguards are met, including that the agreement is fair. In a recent High Court case, the Court considered the interplay between fairness and the parties needs, ultimately departing from the prenup, but only so that the Wife’s needs were met.

Needs and prenups

In this case, the prenup restricted the Wife’s claims, to the extent that it did not meet her basic needs (i.e. the need to be housed and have a reasonable income). Although the prenup was drafted to suggest that it would, in fact, meet the needs of the parties should they divorce, when it came to it, that was not the case: the Wife (who was the financially weaker party) could not survive and meet the needs of the children which were provided for in the prenup.

Therefore, the Court decided that the Wife should be awarded more than the prenup catered for. However, the new amount was only enough to meet the Wife’s basic needs, rather than the larger sum that the Wife applied for. This was to keep the award closer to the situation outlined in the prenup. Indeed, the Court went as far as to say that, had the parties not signed the prenup, he would have awarded the Wife more.

Review clauses

The prenup in this case also included a review clause, (a clause that allows the parties to amend the terms of the prenup when a certain event occurs). Here, the trigger to review the prenup was the birth of the couple’s first child. However, the parties had two children and did not review the prenup. 

Nevertheless, the Court noted that, the mere inclusion of the review clause itself was enough to indicate that the parties knew that, should a child be born, the prenup would no longer be fair. This fed into the Court’s reasoning in departing from the prenup as discussed above: the document might not be considered fair any more as the trigger event for a review had occurred.

Considering the above, this case demonstrates the power of a prenuptial agreement for the financially stronger party, and the potential danger for the financially weaker party where the prenup does not meet their needs. Indeed, the ultimate outcome of this case was that the Wife received 8% of the marital assets, and Husband received 92%. With this in mind, it is crucial that both parties seek robust legal advice to understand the terms that they are signing, and their potential impact.

If you have any queries about pre- or post-nuptial agreements, please don’t hesitate to contact us. We have a specialist team of solicitors who are able to provide expert advice on nuptial agreements. Visit our family law page for more information or to speak to someone in our expert team. 

Charlotte Clewes can be contacted at Charlotte 0121 214 5457

Catriona Ellis can be contacted at 0207 6503893