Why pre-nuptial agreements matter when someone vulnerable is getting married?
If you yourself have experienced personal injury or disability, or you care for someone who is vulnerable — whether through disability, injury or capacity issues — life often involves thinking ahead in ways other people don’t have to.
That’s especially true when big life milestones, like marriage, are approaching.
Many of our deputyship clients have substantial estates generated during their lifetime or from clinical negligence/personal injury awards. These funds must be carefully protected to meet their needs for life.
Understandably, our clients and their family members, deputies and attorneys often ask us:
How do we protect these funds if the marriage doesn’t work out?”
The answer is likely to be a pre-nuptial agreement — often referred to as a “pre-nup”.
What is a pre-nuptial agreement?
A pre-nuptial agreement is a legal agreement signed before marriage, setting out what will happen to a couple’s finances if they later divorce.
Such agreements are particularly important where one party enters the marriage with pre-marital funds that they need to protect, including where they have received compensation or an injury settlement intended to support them for life.
Although pre-nuptial agreements are not contractually bindings or automatically upheld by the courts of England and Wales, the position has significantly changed over recent years, and the reality is that they will usually be upheld by the courts if certain key conditions are met.
Those conditions were set out in the landmark case of Radmacher v Granatino in 2010, in which the court confirmed that pre-nuptial agreements could be upheld in England and Wales in certain circumstances.
The conditions include:
- Both people entering into the agreement freely
- Both having a clear understanding of what the agreement means for them, including what they are giving up by signing it
- The terms of the agreement being fair and meeting everyone's needs, particularly where vulnerability or financial hardship might arise.
Where these considerations are met, it is likely that a carefully prepared and well thought-out pre-nuptial agreement will carry significant weight upon divorce.
This is especially true where one party has received compensation or injury settlements intended to meet their future care and support needs — as the courts will usually recognise the importance of protecting those funds.
That’s why, for vulnerable individuals and their families, a pre-nuptial agreement can provide real peace of mind.
Can someone with capacity issues have a pre-nuptial agreement?
Capacity is decision-specific, and so will be determined on a case by case basis. Someone might lack the ability to manage their daily financial affairs but still have the capacity to marry — and to sign a pre-nuptial agreement.
Key considerations in determining whether someone has capacity to enter into a pre-nuptial agreement include:
- Whether they understand broadly what assets they have (although the case law does show that a person can enter into a pre-nuptial agreement even if they are not fully aware of their estate)
- Whether they understand what marriage means, including in terms of financial consequences
- Whether they understand what they may be giving up by signing the agreement
Where an individual lacks capacity to manage their financial affairs, if they are entering a pre-nuptial agreement particular consideration will need to be given to factors that may affect their understanding of the agreement and what they are giving up. These include considerations as to any pressure or duress they have been placed under.
If capacity is in doubt, it’s essential to seek advice from lawyers who understand capacity issues at an early stage, so the pre-nuptial agreement can be progressed. Arranging an assessment of their capacity to sign a pre-nuptial agreement should also be considered.
What about protecting personal injury or clinical negligence compensation in divorce?
If a vulnerable person has received a large injury settlement, these funds are usually intended to meet their lifetime needs. The award is not calculated with the expectation that the funds will be reduced upon divorce.
A carefully drafted pre-nuptial agreement can help protect these funds, while also ensuring that both parties’ future needs are considered.
Without an agreement, in determining a financial settlement the family courts will still carefully consider:
- The source of funds (e.g. compensation awards)
- Each person’s financial needs, especially where disability or care costs are involved
- Disabilities of either party
The above considerations are part of a wider list of factors that the court is required to take into account.
What happens if there’s already been a marriage?
If a pre-nuptial agreement wasn’t signed before the wedding, parties may choose to enter into a post-nuptial agreement instead.
This can be especially useful where:
- Capacity issues arise after marriage;
- The family’s financial landscape changes after marriage; or
- There are difficulties in the parties’ relationship.
How we can help
Every family — and every vulnerable individual — is different. Our family law and private client team regularly work together to advise on pre-nuptial and post-nuptial agreements involving injury settlements, trusts, deputyships and capacity issues.
We’re here to help protect what matters most.
Get in touch
If you are considering a pre-nuptial agreement involving a vulnerable person, or want to explore how to protect injury settlements in divorce, we’d be happy to help.
→ Contact us today for a confidential conversation.
Further information
If you are affected by any of the issues covered in this blog or if you have any questions, please contact a member of our court of protection & deputyship and family & divorce teams, who have longstanding experience in advising clients in cases involving capacity, wealth protection and matrimonial proceedings.
About the authors
Sameena Munir is a solicitor in our private client team. She has a Court of Protection focus and works closely with clients who lack capacity. She prepares statutory will and gift applications to the Court, and creates personal injury trusts. She also advises on lasting powers of attorney and probate matters.
Cate Maguire is an associate in the Family Team. She advises clients on matters including divorce and civil partnership dissolution, associated financial issues and issues surrounding children. She has particular expertise in complex jurisdictional issues and financial matters. She has a clear understanding of the particular issues facing international families. She also has a wealth of experience in dealing with complex trust and corporate structures and issues of company values, both in relation to domestic and cross-jurisdictional entities.
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