Noel Ferry also advocates such an ‘insurance policy’ for cohabiting couples
RECENT cases in England have highlighted that the courts there will now give significant weight to a prenuptial agreement when splitting assets on divorce. Yet little has been said about Scotland’s separate legal and divorce system and that prenuptial agreements have been valid and prevalent in Scotland for hundreds of years.
Marriage Contracts were commonly used here from about the 14th century onwards. The oldest preserved Marriage Contract in Scotland is from 1281. Contrary to popular belief, prenuptial agreements were often designed to protect the wife’s property. Scottish lawyers were therefore ahead of the game long before lawyers in Hollywood got in on the act. As women’s rights changed over the centuries, the need for prenuptial agreements did fall away a little but they did not expire completely. They evolved to plug other gaps in the divorce laws and to provide more certainty than a court could offer. Indeed, prenuptial agreements continue to be part of the armoury of a good family lawyer and have come back into vogue, especially as divorce rates have risen and more people marry later in life (having already built up independent wealth).
In Scotland, such agreements are valid here because we have long recognised the right of people to enter freely into contracts of their own choosing as long as they are fair and reasonable.
The emergence of cohabitants’ rights have led to pre-cohabitation agreements also being popular. The reason for this is that a prenuptial agreement and pre-cohabitation agreement can provide certainty where the law does not. A common cause of argument on divorce is where one party has brought their own assets into the marriage or they have used inherited or gifted money to acquire new matrimonial property. Despite the source of these assets being nothing to do with the couple’s joint efforts, there is no guarantee that a court will exclude such assets from division. This leads to uncertainty and sometimes significant legal costs trying to get a judge to divide these assets fairly. A prenuptial agreement ring fencing such assets prevents such argument in the first place.
Similarly, judges have a very wide discretion as to what orders for payment they might deem fair in a cohabitant claim. It is therefore very difficult to negotiate a settlement between cohabitants who have separated. This has led to a number of expensive court actions being raised with no guarantee right up to the end of the case as to what either party might achieve by way of a settlement. A properly worded cohabitation agreement would dispel uncertainty.
As almost 50 per cent of marriages fail nowadays, people have to be realistic and plan ahead, just in case. Entering into an agreement about what might happen in the unfortunate event the marriage ends means there will be no hidden agendas and no surprises if things go wrong.
Don’t believe they are only for rich men; as many women as men ask for them. Often, it is actually parents who advise their children to get one because wealth is going to be passed down to them. More people are marrying when they are older and sometimes for the second or third time. They usually will already have children from previous relationships. Those persons often wish to ensure that their children are given their assets. Likewise, anyone who has been through a bitter divorce already will certainly not wish to undergo the stress and strain of another bitter divorce process if they get remarried. For the wise, prenuptial agreements are a sensible and inexpensive insurance policy.
• Noel Ferry is a Partner with Turcan Connell www.turcanconnell.com