Pre-Nuptial Agreements: Are they worth the paper they are written on?

Question:
I am going to get married late next year and my boyfriend is a very successful businessman who owns a huge amount of property. He was divorced a number of years ago and has said to me that he wants me to sign a Pre-Nuptial Agreement before the wedding takes place. Are these Agreements legally binding?

Answer:

Pre-Nuptial Agreements and their legal status has been considered fully in the report of the Study Group on Pre-Nuptial Agreements submitted to the Minster for Justice in April 2007.

This report reviewed the law, both in Ireland and elsewhere. It also reviewed all the recent Irish case law on “proper provision” “in finality” and how these might impact on the enforcement on these types of agreements.

The report states that Pre-Nuptial Agreements are likely to be enforceable in Ireland but should be open to variation by a Court in exercise of its discretion. This would arise in the event of Judicial Separation Proceedings or Divorce Proceedings.

At present Section 20 (3)(a) of the Family Law (Divorce) Act 1996 provides for the Court to have regard to the terms of any existing Separation Agreement that has been entered into by the Spouses and still in force. The report made the following recommendations:-

That a new Section 16(2)(a) of the Family Law Act 1995 and a new Section 20(3)(a) of the Family Law Divorce Act 1996 be created to give express statutory provision to recognise Pre-Nuptial Agreements. This would allow a Court to examine and scrutinise the Agreement which is subject to different considerations than a Separation Agreement and therefore an additional separate provision should be made to provide for same.

The Group recommended that no change be made to Section 16(2) of the Family Law Act 1995 or Section 20(2) of the Family Law (Divorce) Act 1996. These Sections deal with the various factors to be considered by the Court in exercising its decision making power on Separation or Divorce. This would place the execution of such an Agreement on an equal footing with factors such as the age of the parties, the duration of the marriage and the financial position of the parties.

The Group also recommended that certain formalities and procedural requirements should be carefully followed for a Pre-Nuptial Agreement to have binding effect. The Group recommended to the Minster that the Family Law Act 1995 and the Family Law (Divorce) Act 1996 be amended to include a definition of a Pre-Nuptial Agreement so that, for an enforceable Agreement, it must be in writing, signed and witnessed and made after each party has received separate legal advice and with full disclosure of each parties financial information.

There is clear uncertainty at present in Irish Law regarding the enforceability of a Pre-Nuptial Agreement. In the case of a short marriage the Agreement may be of persuasive power if the reasonable formalities are fulfilled in its drafting and if each of the parties has got independent legal advice with reasonable financial disclosure on each side.

If the terms of the Pre-Nuptial Agreement are considered to be fair it is more likely to be enforced and will satisfy the “proper provision” test for each spouse that the Court must apply under the Family Law legislation.

The question of duress will also undoubtedly be considered. When someone is contemplating marriage and their intended spouse is in a stronger financial position then the question of duress will surely come into play. It is obvious that one party will seek to get the benefit of the Agreement over the other party in the event of the marriage breaking down.

A Pre-Nuptial Agreement may be adapted to suit the needs of the particular case – for example, to protect property for children of a first marriage. The Agreement can also be a useful tool to protect long established assets where there are other assets available to provide for the spouse.

Some Pre-Nuptial Agreements provide also for a review of the Agreement to be carried out after a specified period, for example, 3 – 5 years with the possibility that the Agreement would no longer be valid after that period if the marriage is successful.

Whether such a Clause would be recognised in Ireland remains to be tested. It would be advisable to at the moment to consider very carefully the implications of signing