HMRC no longer reviewing Family Investment Companies
Whether pre-nuptial agreements are less fair to women is debatable and, the recently published Law Commission’s recent report raises some important gender issues. The report states that, “…concerns about gender equality and fairness are linked to a general view that the financially weaker spouse, perhaps financially weaker because of childcare responsibilities, should not be left with nothing at the end of the marriage.”
Empirically and anecdotally, most family lawyers would agree that it is invariably women who are asked to sign a pre-nuptial agreement. Contemplating a negative outcome challenges the way we think about marriage and all too often, couples treat the pre-nuptial agreement as nothing more than an ‘insurance policy’ or a means to an end.
The Law Commission has responded to gender concerns with recommendations that a “…qualifying nuptial agreements cannot prevent the court from making provision for a party’s needs”.
This begs the question – how is ‘need’ defined and how is it assessed?
The Law Commission considered need as “financial need”, the definition and interpretation of which is not entirely consistent, largely because it is an inherently subjective concept.
The report further suggests that “…we make it clear that an agreement which leaves a spouse or former spouse without reasonable provision for income, housing and the other elements that family lawyers understand as “needs” will continue to be subject to the court’s control.”
But, is this really enough?
The important questions below reveal how difficult it can be to know how a marriage will develop and how a change in circumstances can materially impact upon the fairness of a pre-nuptial agreement.
For this reason, not only is it beneficial that the parties to a pre-nuptial agreement consider a review clause in their agreement, but, before discussing the terms of a pre-nuptial agreement, the parties should take the time to carefully consider the following questions:-
Discussions about a pre-nuptial agreement will always be the elephant in the room, not least because it usually rears its head at a time when couples are preparing for what they hope to be the happiest day of their lives. But, the vagaries of life and supervening events can drastically change a spouse’s financial position after marriage. Taking the time to consider these points can help to ensure that the parties are able to reach a fairer pre-nuptial agreement – for both the stronger and the weaker financial party.
To read more about pre-nuptial agreements and the proposed changes by the Law Commission, see our other recent blogs:
Should you have any further questions, please contact a member of our family team.
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