Marital property agreements are a sensitive subject to future or present spouses and understandably so. Pre-marital agreements especially may create tension between spouses-to-be who would have to contemplate possible divorce and financial separation scenarios and all their ramifications even before the marriage ceremony. Having said that, a marital agreement regulating parties’ relationship might also save a lot of stress in the future.

Many couples settle disputes out of court, but there are still a number who seek judicial intervention. While divorce proceedings are fairly straightforward, financial separation, unless the parties reach a mutual consent, is a lengthy and not to mention, costly, exercise. Practitioners give their clients advice on the likely outcome building on experience and legal developments; however the wide discretionary power of the courts and regional inconsistencies in courts’ approach bring in an element of unpredictability into every case. Due to this, practitioners face difficulties when managing clients’ expectations, but this is a topic meriting a separate article.

Historically marital agreements have been unenforceable, meaning that although they are valid they are not binding upon parties unless the court makes an order in similar terms. Agreements governing financial consequences after marriage have been approached by the courts with caution, however things started to change after the landmark decision in Radmacher v Granatino [2010] UKSC 42 case where the Supreme Court recognised that the English courts were now much more ready to give the appropriate weight to marital agreements and that such agreements should be given effect unless in the circumstances it would be unfair to do so.

Radmacher marked a new development in law but although it received a positive treatment by the courts in subsequent cases, it left some uncertainties. The baton was taken over by the Law Commission that carried out an extensive consultation in order to clarify the law in this area and make recommendations to improve predictability of outcomes in financial separation cases. The final Law Commission’s report was published on 27th February 2014. Among other things, it was suggested to introduce “qualifying nuptial agreements” which would be “enforceable contracts, not subject to the scrutiny of the courts”. In order to be enforceable the qualifying nuptial agreement would have to be made in accordance to certain rules.

According to the Office for National Statistics, although the trend between 2002 and 2012 was that numbers of divorce have dropped from 147,735 to 118,140, it is expected that 42% of marriages will end in divorce. Considering the statistics, it certainly seems to be not a bad idea to have a marital agreement in place, especially if/when the bill proposed by the Law Commission comes to fruition providing better assurance that marital agreements would be legally binding on its parties.