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22.10.2008
Prenuptial Agreements
Contrary to the prevailing public view, prenuptial agreements are not illegal or unenforceable under Irish Law. They are in fact expressly referred to, and provided for, in the legislation, at Section 9 (1) (c) of the Family Law Act, 1995, and Section 14 (1) (c) of the Family Law (Divorce) Act, 1996. In these sections pre-nuptial agreements are described as "ante-nuptial", and the sections also refer to post-nuptial agreements.
There is nothing preventing anyone intending to marry from signing a prenuptial agreement. The issue in this country lies in the fact that the Courts are not obliged to enforce it. Prenuptial agreements are part of the family law system in many other common law countries, including the US, Canada, New Zealand and Australia. Ireland is one of only two remaining countries in the EU which do not have legislation allowing prenuptial agreements, though the Courts in Britain have begun taking such agreements into account.
The traditional fear of walking up the aisle with a full farm and walking down with half of is still very much a concern for the agricultural community. A survey of 200 young farmers carried out by Macra na Feirme revealed that a massive 80% believe prenuptial agreements should be recognised in Ireland. Just 20% of those questioned said they did not believe pre-nuptial agreements should be recognised in this country. However, when further quizzed, 34% of farmers said they would actually avail of a prenuptial agreement if they became recognised under Irish law. Some 28% said they would not avail of it and the remaining 38% were undecided as to whether or not they, personally, would ever avail of such an agreement. All 200 farmers questioned were under the age of 35.
In April 2007 the Study Group on Pre-Nuptial Agreements, presenting to the then Tanaiste and Minister for Justice, Michael McDowell TD reported that
it was appropriate that any legislation which might be enacted to deal with the recognition of a prenuptial agreement should contain procedural guidelines. It accepted that as a matter of principle any prenuptial agreement would have to comply with general contractual principles and a Court would have to be satisfied that the agreement was not entered into as a result of duress, undue influence and that it was not an unconscionable bargain. The Group took the view that certain procedural safeguards should be imposed as a matter of law and that these should be expressed in clear terms so that parties contemplating such an agreement would be both informed and protected. In its conclusion the Study Group recommended that the Family Law Act 1995 and the Family Law (Divorce) Act 1996 be amended to include a definition of a prenuptial agreement such that an enforceable agreement must be: in writing, signed and witnessed; made after each party has received separate legal advice; made with full disclosure of financial information; and made not less than 28 days before the intended marriage.
So, what is a Prenuptial Agreement?
A prenuptial agreement is an agreement entered into by a couple who are intending to marry and who wish to set out how the main financial division of the assets is to be effected upon Divorce or Judicial Separation. The Agreement will vary according to each couples particular circumstances but will set out issues such as; lump sum payments, pensions, maintenance and custody.
The intention of such an agreement is to try and avoid a dispute in relation to the division of the assets upon separation by essentially , contracting out, of the Irish Family Law by treating the parties as if they had never been married and just remained partners or strangers for legal purposes. The agreement may act to clarify potential arguments upon Divorce or Judicial Separation.
Clearly an agreement can act to provide comfort for the couple entering marriage by assisting in taking pressure off the parties in the event separation .
An agreement will generally address;
-The length of the pre-marital contract,
-Percentage division of present and future property,
-Succession act rights,
-Maintenance,
-Lump sum payments,
-Pensions
-Custody
Is it enforceable?
As previously stated, these agreements are not illegal or unenforceable in Ireland and the current opinion among the legal profession is that such agreements can be of assistance in the breakdown of the marriage as they can be referred to and used as a guide for the distribution of the assets provided the Judge considers that the agreement was made fairly and responsibly and with due regard to the interests of both parties.
As the recent Macra na Feirme survey shows, public opinion is moving towards the acceptance that such agreements provide peace of mind and in certain circumstances, are of definite benefit to the parties when getting married. Recently the Government has proposed that prenuptial agreements be formally recognized for the first time. The basis upon which they should be recognized is that the Judges would still be allowed to take into account any changes in the married couple’s circumstances where a prenuptial agreement exists. Furthermore the court may look behind the agreement and may distribute the assets differently from what was proposed in the agreement.
In our view order for a Court to consider the validity and enforcing the terms of such an agreement entered into by the parties it is necessary that the following minimum requirements are fulfilled by both parties;
-Provide full disclosure of each of their financial situations.
-Receive independent legal advice concerning the effect the agreement will have on the breakdown of the marriage and the division of the assets of the parties.
-Receive independent legal advice in the situation if the marriage was to breakdown and no agreement was in place.
-Sign an acknowledgement that the agreement is intended to be legally binding
-Agree to insert a provision that the agreement should have periodic reviews every number of years or after a birth of a child or a major increase in wealth.
-Agree to the percentage split of the assets, maintenance, and custody in the event of the breakdown of the marriage.
The agreement must be made in contemplation of what would be fair or what one party would receive in the event of the breakdown of the marriage-In short a Court will not have regard to such an agreement unless it has substantial and procedural fairness.
If you are considering entering into a prenuptial agreement and wish to discuss your circumstances with us please contact Seamas Turner ;053/9122555 or sturner@mjoc.ie
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