The prenuptial agreement has become expected of even the most established Hollywood couples, so much so that it has become a feature of popular culture. The most recent to make the headlines is that which accompanied the marriage of Angelina Jolie and Brad Pitt, with the press reporting that the couple had incorporated an ‘ironclad adultery clause’ into their prenuptial agreement.
With that cultural backdrop, it is unsurprising that the prenuptial agreement has often been considered unpalatable – seen as a useful tool only for the super-rich, or a necessary one only for the superficial. However, the prenuptial agreement is a practical instrument for ordinary people, and is commonly used to protect assets and family life in the event of separation. With that in mind, it is important to consider the legal status of the prenuptial agreement in Scotland, and what value it could have in everyday life.
A Guide to Prenuptial Agreements in Scotland
What is a prenuptial agreement?
A prenuptial agreement is a written agreement that can be entered into before any legal union and commonly regulates the division of assets. The content of any agreement varies, but often the parties of a marriage or civil partnership will use it to designate what property is to be considered matrimonial or partnership property, as well as to make financial arrangements in the event of a separation. In Scotland, they are also known as ante-nuptial agreements.
Are prenuptial agreements binding in Scotland?
Some of the reluctance that people feel when considering a prenuptial agreement stems from a lack of clarity over their legal status. Essentially, people are often unsure of whether or not such arrangements are binding and will be upheld by a court in the event of a dispute.
Much of this confusion stems from English, rather than Scots, law. In England and Wales, the prenuptial agreement has had a turbulent time before the courts. For many years, the courts indicated that such arrangements would not be binding on the parties involved, and would therefore be discarded, on the basis of public policy. They were seen as undermining the institution of marriage. In addition, it was felt that they limited the discretion of the court – preventing judges from making a decision based on the individual case before them.
More recently, however, the English courts have made it clear that they are willing to uphold a prenuptial agreement under certain circumstances. In the landmark case of Radmacher v Granatino [2010] UKSC 42, the Supreme Court made it clear that, contrary to previous authority, English courts would uphold such an arrangement as long as it was fair to do so. This meant that the agreement had to be entered into freely, where both parties were aware of the consequences of doing so. Such an agreement could not prejudice the requirements of any children and, although it was not strictly required, it would be ‘unusual’ for the court to uphold an agreement if the parties had not had access to legal advice. Reflecting these changes, the Law Commission has now published proposals that would make prenuptial agreements binding under certain, defined circumstances.
The changing status of prenuptial agreements in England has caused some to doubt their legality in Scotland. However, the Scottish position on the matter has always been considered to be different. Although the legal position of such agreements has never been formally challenged, in general, prenuptial agreements have been considered legally binding in Scotland and have never precluded on public policy grounds. Instead, there is a long tradition of pre-wedding contracts in Scotland, where they are largely treated like any other contract.
Is it therefore possible to make an ‘ironclad’ agreement in Scots Law? The answer, unfortunately, is probably no. A prenuptial agreement is an attempt to ‘ring-fence’ matrimonial assets. As such, it falls under section 16 of the Family Law (Scotland) Act 1985, which means that either party to the agreement can apply to the court to have its terms varied or set aside. Thus, even the Scottish courts will change or dispose of an arrangement where it is unfair or unreasonable. This may be the case where one party was forced to sign it under duress, or where they were tricked into making the agreement on the basis of a misrepresentation.
The Scottish courts, however, appear more willing to uphold prenuptial agreements than their English counterparts. Moreover, post-Radmacher, the English courts take account of the position of the parties at the time of their separation into their assessment of whether or not the agreement is ‘fair’. The focus of Scottish judges, however, is on the position of the parties when they made the agreement in the first place – not the position of the parties at the time of their divorce.
Features of a strong prenuptial agreement
While it is therefore difficult to make an ‘ironclad’ agreement, there are certain ways to bolster your prenuptial agreement. These include:
Seeking legal advice before entering into the agreement. The Scottish courts place great importance on the fact that the agreement was freely made at the time. Both parties should therefore have access to independent legal advice before making their prenuptial agreement. This is one of the best ways to ensure that a prenuptial agreement is upheld in Scotland.
Having your prenuptial agreement drafted by a lawyer. Careful drafting of an agreement can help you avoid a court battle in the future. Using a lawyer to help you create your prenuptial agreement will make sure you cover all relevant assets and bring all matters to your partners attention before entering the agreement.
Signing your prenuptial agreement in plenty of time. Do not leave your prenuptial agreement to the last minute. As cases such as Kibble v Kibble 2010 SLT (Sh Ct) 5 indicate, courts tend to be more suspicious of agreements signed close to the date of the wedding, as this ‘shotgun’ approach may indicate that one of the parties was under pressure.
Who should make a prenuptial agreement?
Nearly half of all marriages end in divorce. While many of these will be amicable, avoiding the courts, others will involve bitter disputes. A prenuptial agreement is a practical device for any person planning a marriage or partnership.
However, there are certain types of individuals for whom a prenuptial agreement is particularly advisable, including:
- Individuals of high net worth, where, for example, one has inherited money;
- Individuals with distinctive pre-marriage assets – particularly where pre-marriage funds are used to purchase matrimonial property;
- Individuals who are marrying later in life, where one or other of them have a history of complicated property transactions;
- Individuals who have previously been divorced and are re-marrying, to avoid any future dispute between your former partners.
Making a Prenuptial Agreement: Preparing for the Future
No one likes to begin a marriage with talk of a potential separation. However, in reality, life is unpredictable and complicated. Although both parties will hope that they never have to use it, it is often sensible to make a prenuptial agreement. The law in Scotland recognises the practical utility of such agreements, allowing you to avoid future disputes in court. The solicitors at Gibson Kerr have extensive experience in this field and can help you create a binding prenuptial agreement today. For more information, please contact us in Edinburgh on 0131 516 4325 or in Glasgow on 0141 530 9186. Alternatively, you can get in touch using this contact form.