Leeds Divorce Solicitors

Nuptial agreements are formal written agreements prepared by parties either in contemplation of a marriage (a pre-nuptial) or following marriage (a post-nuptial). Nuptial agreements record the intentions of parties as to the division of their property, finances and personal belongings in the event of a future divorce. They can also be used to record proposed care arrangements for children. People tend to enter into nuptial agreements to protect and preserve personal wealth and record their future wishes as regards to the separation of their financial resources if their marriage was to end.

Although many consider nuptial agreements to be unromantic, if properly drafted and executed, nuptial agreements can (and often do) save spouses thousands of pounds in legal costs and they can make it much easier for spouses to separate with dignity and respect. Such agreements can also reduce some of the uncertainty and risk associated with court proceedings. For this reason, many regard nuptial agreements as a type of insurance policy.

Currently, a nuptial agreement is not in-itself legally binding in England and Wales and it is not possible to oust the jurisdiction of the court. However, if certain conditions are met it is more likely that a court will uphold such an agreement and refuse to interfere with its terms. These conditions include:

• That the agreement is fair and reasonable on the face of it;
• Both parties having the opportunity to obtain legal advice in respect of its terms;
• In the case of a “pre-nup”; that it is signed at least 28 days before the marriage;
• That neither party was placed under undue influence or duress to enter into the agreement; and
• That the agreement is underpinned by full and frank financial disclosure.

First and foremost, we recognise that a fair division of assets often means different things to different people and, perhaps unsurprisingly, spouses often have different expectations about what this looks like in the event of their separation.  No situation is ever quite the same and the court will consider all the circumstances of a case before deciding how financial resources (or liabilities!) should be divided.

In law, the starting point is a presumption of equality. The court can depart from equality, but usually only if the “needs” of one of the parties justifies this. The concept of “needs” is inevitably a subjective term. If the court was tasked with looking at this it would do so by considering certain statutory criteria set out in the Matrimonial Causes Act 1973. Amongst other things, to set a benchmark from which to assess needs this is often measured against the standard of living enjoyed by parties during their marriage. The court will also give first consideration to the welfare of any minor children of the family. Relevant considerations include the earning capacity of each party, their respective financial resources, the length of the marriage and the health of each party and any children of the marriage.

Importantly, when it comes to sorting out finances on divorce the court does not make any material distinction between the roles assumed by each person during the marriage. In principle therefore, whether someone was a breadwinner or homemaker will not in-itself have a bearing on the court’s approach to the sharing exercise.

Pre-marital assets may or may not be subject to the sharing exercise and there is no clear answer to this. Rather, the approach of the courts tends to vary depending on the particular background of a case and the nature of the asset or financial resource in question.

As a general rule, capital resources and assets which are not referable to the marriage may well be regarded as non-matrimonial and potentially be excluded from the sharing exercise. Whilst in itself this may not seem particularly controversial the devil is very much in the detail. For example if a non-matrimonial asset is “mixed” with other resources it could fall into the pot and be taken into account by a court if an application was made for financial relief.  An example of this is where one party make an unequal contribution towards the purchase of a property which becomes the family home. Whilst the capital used to purchase the family home might come from outside the marriage (e.g. by way of gift or inheritance) in practice the court has been very reluctant to disregard this from the sharing exercise. This is particularly the case for marriages of longer duration and, as is often the case in these situations, the court’s overriding concern will inevitably be the needs of the parties.

Even where a court does accept that an asset is non-matrimonial this does not prevent it from being taken into account. Indeed, when the court is undertaking its factual inquiry into the background of a case, it is bound by law to have regard to all the financial resources which each party to a marriage has or is likely to have in the foreseeable future; irrespective of whether they are matrimonial or not. What this could mean in practice is that whilst a non-matrimonial asset of one spouse might not be shared, the other spouse could receive more of the matrimonial resources to meet their needs. In this scenario, the existence of a non-matrimonial resource could therefore militate towards an outcome which results in the other spouse retaining more of what has been accumulated during the marriage.

The court also has some discretion it its treatment of pensions on divorce. Often, and particularly where parties marry later in life, a spouse may build up some pension provision within a marriage and some pension provision outside of it. The question then becomes, to what extent should a particular pension pot be vulnerable to the sharing exercise and how much of the pension should be taken into account? This is far from clear cut and in any situation where pension sharing orders may be made specialist advice should be sought.

There are two principal ways that a spouse to marriage may try to hide or conceal assets. Firstly, a spouse may fail to disclose their existence. Secondly, a spouse may understate the value of their assets. If you think that your spouse is hiding assets, early legal advice is essential. Sometimes particularly mischievous spouse’s may try to divest themselves of their assets, transfer property to third parties or divert income to other sources to try to depress the appearance of their net worth. More commonly, they will simply underplay the value of financial resources that they have disclosed.

If an uncooperative spouse is unwilling to engage in financial disclosure on a voluntary basis the first port of call may well be an application to the court to compel their co-operation. If the spouse fails to provide disclosure then applications to enforce can and should be exercised. Alongside this, adverse costs orders may also be made.

If financial disclosure has been exchanged but there is credible cause to question this then there are a number of steps that can be taken to address any concerns in respect of the disclosure exercise. This may include obtaining expert advice from valuers who can inspect property or personal belongings. A forensic accountant may need to be instructed to value business interests or an actuary’s assistance may be sought to provide a fair value of a particularly complex pension scheme.

At any stage in proceedings, where there is concern that a party has or may dispose of assets to try to defeat a former spouses matrimonial claims then applications to the court may need to be made for avoidance of disposition orders or for injunctions such as freezing orders, to protect other assets where there is a risk of further dissipation.

In these situations, prompt action on behalf of your lawyer underpinned by a careful analysis of your spouses financial position is essential.

Mediation is one form of alternative dispute resolution. In appropriate circumstances it can be a powerful tool to assist parties to reach agreement about a number of issues that often arise following relationship breakdown. This could include what to do with the finances or how to organise the care arrangements of any children of the family. The process of mediation is designed to support parties to reach agreement without needing to rely on either the court system or an arbitrator to determine their case for them. Consequently, people who engage in mediation often have more control over the compromises that they are prepared to make in their case and this can be important and empowering. Mediation is not about attributing blame and the process is designed to help people focus on the future rather than the past.

The mediator’s role is to set parameters for dialogue so that you and your former partner can negotiate meaningfully in a controlled, safe environment. Your mediator should work with you both to help you identify what you want to achieve and help you work towards an acceptable solution in respect of matters of dispute between you. Before any joint meetings are held the mediator should meet you both independently of one another for an initial assessment meeting. This meeting is used to explain the process, identify your respective objectives and clarify what is important to each of you. The mediator will also use this meeting to assess whether they think mediation would be suitable and appropriate in your particular case.

If mediation proceeds, one or more joint meetings will be arranged which are facilitated by the mediator.

The meetings are underpinned by certain principles. These include:

1) The process is voluntary;

2) Anything discussed in mediation is confidential; is confidential;

3) the mediator is and should remain impartial; and

4) You are in charge of the meeting (not the mediator).

Any offers made in mediation are considered to be without prejudice. This means that the offers cannot be disclosed to the court. This feature of mediation is intended to encourage both parties to negotiate freely.

If agreement is reached this will be recorded in a formal document known as a “Memorandum of Understanding”. Once this has been prepared you should consider consulting your family lawyer for advice about the merits of setting this out in a legally binding court order.