PENNY DROPPING: PRENUPS ON THE RISE 

Published on 21 May, 2024 | Melanie Hadwin

Over the last couple of decades, we have seen considerable change in the nature of British households.

Whereas marriage was, for instance, regarded as the absolute gold standard for domestic relationships, it has been in almost constant decline for half a century.

Figures published by the Office for National Statistics (ONS) show that there were 85,770 marriages in across England and Wales during 2020, the most recent year for which such data is available (https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/marriagecohabitationandcivilpartnerships/bulletins/marriagesinenglandandwalesprovisional/2020).

Yet even if we discount the historically low number of weddings during a year which was exceptional in so many ways, it’s clear to see why some people argue that marriage is rather out of fashion.

The number of marriages during 2019 was 49 per cent down on that recorded during 1972 (426,241).

As the ONS has also demonstrated, cohabitation has waxed as marriage has seemingly waned. According to data issued just a fortnight ago, unmarried couples now make up 18 per cent of all opposite sex partnerships (https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/families/bulletins/familiesandhouseholds/2023).

Given, however, that break-ups happen regardless of individuals’ marital status, it is of immense importance how relationships are regulated.

Once again, I would argue, we are noticing something of an evolution taking place in that a greater proportion of people are setting up home together having put pre-nuptial or cohabitation agreements in place.

Pre-nups have grown in popularity since a landmark UK Supreme Court ruling in 2010 in favour of the German heiress Katrin Radmacher (https://www.supremecourt.uk/cases/uksc-2009-0031.html).

A strong proportion of those agreements to date have been driven by wealthy parents anxious to ensure that any amounts left as inheritances should not be among those assets contested during their children’s divorces.

It was something which I pointed out earlier this year to Jonathan Ames, the Times’ Legal Editor (https://www.thetimes.co.uk/article/1147b6f6-9bcf-4651-b8e4-1de15908515c?shareToken=32443d4397f84144def0a855c779034e).

Over time, though, we have started to see a subtle but significant shift due, I believe, to growing awareness of the merits of pre-nups irrespective of parental prompting.

Quite often in the past, the kind of increase which myself and my colleagues have seen in pre-nups of late might have been the result of a single pivotal event, such as a high-profile celebrity example.

In our experience, though, there are now a number of factors at play, of which inheritance is just one.

Rises in property and business values are two more, along with a upswing in investment portfolios as the world’s stock exchanges have rallied following the end of the Covid-19 pandemic.

Close scrutiny of the ONS’ data reveals another; namely, a continuing climb in the age of those choosing to marry.

The average age of women who married during 2020 was exactly 10 years higher than in 1970. On average, grooms in 1970 were nearly 12 years younger than their counterparts 50 years later.

People of that age may not only have established careers and amassed more assets than previous generations but could also have inherited the sort of wealth which needs to be protected.

Men and women of any age who have been through a divorce – either their own, their parents or those of friends – are also more unwilling than ever before to expose their finances to the uncertainty which comes with the discretionary application of family law in the courts.

That is true for those looking to remarry and whose enthusiasm for a new spouse could understandably be tempered by experience. It might especially be the case if those same individuals want to ringfence their assets for children from a previous marriage.

We should not discount an anecdotal element too. As a greater number of people put pre-nups in place, so more individuals are likely to know someone who has first-hand knowledge about what and how useful they are.

In spite of all this, critics say, pre-nups still have no full legal weight. A proposal to remedy that or at least reference it may feature in a “scoping report” due to be published later this year by the Law Commission about the process by which the finances of married couples are divided on divorce (https://lawcom.gov.uk/review-to-examine-50-year-old-laws-on-finances-after-divorce-and-the-ending-of-a-civil-partnership/).

Even if the Commission throws its weight behind making pre- and post-nuptial agreements  legally binding, we shouldn’t necessarily regard it as a fait accompli.

After all, a report which it produced in 2014 calling for just that failed to become law (https://lawcom.gov.uk/project/matrimonial-property-needs-and-agreements/).

Nevertheless, I think that we are close to something of a critical tipping point.

Our caseload would suggest that the penny is dropping in relation to the benefits of nuptial agreements even without new legislation, although that would undoubtedly help.

There is, you see, a broader move towards encouraging autonomy in the family justice system.

Nuptial agreements afford some clarity without the tension, expense and delay which court proceedings can create.

That is a development which I am firmly convinced we should all be grateful for.