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Matrimonial Property, Needs and Agreements: The Report in Bullet Points

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The Law Commission has published its long-awaited report on Matrimonial Property, Needs and Agreements.

  • The Law Commission has published its long-awaited report on Matrimonial Property, Needs and Agreements. The project started in 2009 to examine the status and enforceability of marital property agreements. It was widened in January 2011 with a review of the current law of marital property agreements and a look into options for reform. The project was further supplemented in September 2012 by a consultation on two other aspects: financial needs and non-matrimonial property. The stated aim of the project was not "a full-scale reform" but rather "to bring clarity and predictability to areas of that law that cause particular difficulties."

    Almost 150 consultation responses were received and they have been published on the Law Commission site. 

    So here are the key recommendations in bullet points.

    Marital Agreements

    • legislation should be enacted to introduce "qualifying nuptial agreements" – a draft Bill to achieve that has been published alongside the Report 
    • qualifying agreements would not be used to enable one or both parties to contract out of any responsibility to meet each other's financial needs
    • public policy to be reformed so that an agreement made between spouses, before or after marriage or civil partnership, shall not be regarded as void, or contrary to public policy, by virtue of the fact that it provides for the financial consequences of a future separation, divorce or dissolution
    • both the MCA 1973 and the Inheritance (Provision for Family and Dependants) Act 1975 should be amended accordingly
    • any dispute concerning a qualifying nuptial agreement would be heard by a family judge
    • a marital property agreement would not be a qualifying nuptial agreement unless it is a valid contract
    • qualifying nuptial agreements would need to be made by deed
    • qualifying nuptial agreements would be be invalid if made less than 28 days in advance of the marriage or civil partnership 
    • a marital property agreement would not be a qualifying nuptial agreement unless both parties received, at the time of the making of the agreement, disclosure of material information about the other party's financial situation
    • qualifying nuptial agreements would need to contain a statement signed by both parties (in addition to their execution of the document as a deed) stating that he or she understands that the agreement is a qualifying nuptial agreement and that it will remove the court's discretion to make financial provision orders
    • parties to a qualifying nuptial agreement should not be able to waive their rights to disclosure
    • a marital property agreement would not be a qualifying nuptial agreement unless both parties received legal advice at the time that the agreement was formed
    • legal advice should include advice that the agreement is a qualifying nuptial agreement that will prevent the court from making financial orders inconsistent with the agreement, save so far as financial needs are concerned and the effect of the agreement on the rights of the party being advised
    • a statement signed by both lawyer and client to the effect that the client has been advised would raise an evidential presumption that the advice has been given
    • the requirement for legal advice could not be met by having the same lawyer advise the two parties
    • any variation of a qualifying nuptial agreement would have to comply with all the pre-requisites for the formation of a qualifying nuptial agreement
    • a qualifying nuptial agreement could only be revoked by an agreement, made in writing and signed by, or on behalf of, both parties
    • a court hearing an application for reasonable financial provision by a surviving spouse under the Inheritance (Provision for Family and Dependants) Act 1975 would have regard to any provision in a qualifying nuptial agreement that relates to such a claim.

    Needs

    • that the meaning of "financial needs" be clarified in guidance to be published by the Family Justice Council
    • that guidance should not only make clear the elements involved in assessing financial needs but also make explicit and endorse the courts' practice of making orders that lead to independence
    • that work be done with a view to assessing whether an aid to calculation of needs could be devised. While the authors acknowledge this would be difficult, individuals without access to legal advice need to have more certainty and guidance in the form of figures as well as words as this could be invaluable in supporting couples to reach settlement. Trying to devise such guidelines would be well worth the effort given the relatively low public expenditure required
    • there is no need to amend s25 MCA as the preferred policy reflects so closely what generally happens now, that a change in the law should be avoided
    • the guidance should cover (1) What are needs?; (2) At what level should needs be met?;  (3) The duration of provision for needs and the transition to independence

    Non-matrimonial property

    They make no recommendations about reform relating to non-matrimonial property although they would have liked to, as consultation responses demonstrated it is not possible to achieve consensus. Given that the issue that affects only a minority – those whose assets exceed their financial needs – it is better to enable couples who have non-matrimonial property to make their own arrangements by making qualifying nuptial agreements.

    The full report and associated documents can be downloaded from the Law Commission website. A more detailed look at the Report, written by Max Lewis of 29 Bedford Row will be published on the Family Law Hub tomorrow.

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Published: 27/02/2014

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