Pre-nups are not inherently unfair

This was first published by the solicitors Journal on 21 January 2014 and is reproduced with their kind permission

They may not prevent acrimonious divorces but pre-nups give future spouses the opportunity to think through some of the likely issues, argues Julia Thackray
The Law Commission has been in the process of consulting on specific aspects of the law on matrimonial finance for the last three years and is shortly due to report on the latest element of that consultation.

In 2011 the commission consulted on marital property agreements (the ‘pre-nup consultation’) and in 2012 undertook a supplementary consultation on the extent to which one spouse should be required to meet the other’s financial needs and what should happen to ‘non-matrimonial property’ in divorce settlements. The results, due originally at the end of 2013, are now expected in the next couple of months.

Pre-nups are increasingly wider interest. In Grant Thornton’s 2012 matrimonial survey, almost 20 per cent of lawyers picked them as one of their top three issues for family law reform. But pre-nups are still seen as either the preserve of the super-rich or as being of dubious morality, for which some of the most damning family law commentary is reserved.
One of the latest in this line was a piece published by The Telegraph in December 2013 in which Louisa Peacock stated that pre-nups are ‘wrong, wrong, wrong’. People should not, she argued, need a piece of paper to tell them what is right or wrong when it comes to financial settlements on divorce; if you can’t trust your partner not to be unfair if you ever split up then perhaps marriage is not the right decision.

The best part of 20 years practising family law tells me that many people – men and women – feel that they knew their partner extremely well and are shocked and saddened by things said or done during and after separation. That is part of what often happens when people split up, and there is no insurance against former partners having different views about what is the right divorce settlement.

There is, however, a different perspective on the debate about pre-nups and the point about the ‘rights and wrongs’ of behaviour.

A fundamental misunderstanding about pre-nuptial agreements is the belief that they are inherently unfair, but they need not be. Pre-marital agreements can contain arrangements which a couple believe will suit their whole family’s needs and which will give them a greater degree of certainty in the event of separation. A call for reasonable behaviour and trust in relationships can’t be criticised; of course some people behave appallingly to each other. The vast majority of people, however, do not behave badly. What they do is to hold different views of what is ‘fair’ on divorce. When there is a conflict of views, people have to try to square the circle of those differing positions by discussions, negotiations and/or legal proceedings. What is clear at those times is that the emotional pain of the separation, as well as the patterns of interacting that the couple developed during the relationship, are often major drivers of those discussions. In addition, the formal processes in which divorce negotiations tend to take place encourage more polarised discussions, rather than a joint problem-solving approach being the default one.

A pre-nup itself will not solve these difficulties, but a discussion about pre-nuptial agreements can present an interesting opportunity. It gives a couple the chance to think about how they would approach financial sharing, how they feel about pensions, income, inherited money and other assets. Otherwise it may only be on divorce that couples really start to think, and talk, about financial matters. Not only do many couples not share full financial information – and so do not both immediately know what assets are available to the family – but they often do not come to the negotiations with a shared perspective on how those assets should be shared. So whether or not a pre-nup is the result of discussions, the kind of detailed thought that is provoked can be extremely useful. It allows a couple to talk, at a point when they hope to spend their lives together, and have each others’ interests firmly at heart, to think about the financial consequences of their marriage. It gives an opportunity to explore the extent to which views about firmly held views about these ‘rights and wrongs’ are shared or not.
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Julia Thackray is former head of family at Penningtons and now family law course director at Central Law Training. She discussed divorce and financial settlements with Jane Garvey on Woman’s Hour on 10 December 2013.
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