Demand for pre-nups continues to soar says Grant Thornton
The number of pre-nuptial agreements drawn up by lawyers across
England and Wales has continued to soar, with more than three
quarters (77%) of lawyers saying that the demand for pre-nups had
increased over the past year (up from 67% in 2006 and 54% in 2005),
according to new research issued today by Grant Thornton's Forensic
and Investigation Services practice*.
In addition the number of lawyers voicing the belief that
pre-nups should be legally binding has increased
dramatically. For the first time, more than half (56%) of
lawyers surveyed thought that pre-nuptial agreements should be
legally binding**, up from 37% the previous year.
Robert Kerr, head of Grant Thornton Forensic and Investigation
Services practice, says: "Over the past three years the demand for
pre-nuptial agreements has been growing steadily, highlighting that
more and more individuals are looking to protect previously
acquired wealth upon separation from their spouse."
"While pre-nups may not be legally binding in the UK (unlike in
the US), given the sheer numbers of cases involving pre-nuptial
agreements and the number of lawyers calling for them to be made
legally binding, perhaps this is something that the courts should
look at in more detail," says Kerr.
"At the very least, the Crossley case*** will have strengthened
the position of pre-nups in the eyes of the court," he
continues.
Pre-civil partnership agreements skyrocket
The volume of pre-civil partnerships agreements drawn up across
England and Wales skyrocketed during 2007. Of those lawyers
whose opinion we canvassed, 81% had seen the level of pre-civil
partnership agreements increase or at least stay the same, in
comparison to only 33% in 2006.
"Couples entering into civil partnerships are looking to protect
their financial assets at a greater rate than those entering into
marriage. Given that on average individuals are over the age
of 40 before entering into a civil union, they are therefore more
likely to be financially secure than those entering into marriage,"
continues Kerr.
No such thing as common law marriage
The research also revealed that nearly two-thirds of lawyers
(63%) said the volume of cohabitation agreements drawn up over the
past year had increased, with a further 31% saying the level had
stayed the same as previously.
"As more and more people realise that the concept of "common law
marriage" doesn't exist in the eyes of the court, they are seeking
to protect their wealth through drawing up a cohabitation
agreement, ensuring that upon separation each leaves the
partnership with the assets that they entered with," continues
Kerr.
Collaborative Law
The overwhelming majority (89%) of lawyers surveyed support the
introduction of collaborative law (whereby couples work together,
with their lawyers, to resolve their issues without the involvement
of the court), with only 6% saying they were against it and the
remaining 5% saying they were undecided. This is an increase
on 2006's figure, where 80% supported its introduction.
Despite such strong support for the concept, less than half
(48%) of matrimonial lawyers are trained as a specialist
collaborative lawyer, with a further 11% suggesting that they will
undergo the necessary training in the future. Nonetheless,
this figure is up on last year, when only 33% were trained as
collaborative lawyers.
"Many people from outside the legal profession have a negative
opinion of the fees lawyers make from the lengthy fighting over the
division of assets in divorce cases. However this figure shows that
nearly all matrimonial lawyers believe that divorces without the
involvement of the court are the way forward in the future," points
out Kerr.
Popularity of pre nups and co-habitation agreements
The survey also identified the most popular agreements drawn up
by matrimonial lawyers. The lawyers surveyed spent, on
average, over half of their time advising on pre-nuptial agreements
(29%) and co-habitation agreements (23%), and just over a quarter
(29%) of their time was spent advising on separation
agreements. Their remaining time was split between
post-nuptial agreements (7%), pre-civil partnership agreements (4%)
and other types of agreement (8%).
"The fact that more than half of the agreements drawn up in the
UK are pre-nuptial agreements or co-habitation agreements shows
that people are looking to protect their assets at a greater level
than ever before," concludes Kerr.
ENDS
* Grant Thornton's fifth annual survey canvassed the opinions of
100 of the UK's leading matrimonial lawyers.
** This 56% is made up of 27% who thought pre-nups should be
legally binding, 22% who thought they should be legally binding
unless children are involved and 7% who thought they should be
legally binding as long as the agreements are less than two years
old.
*** When Susan Sangster and Stuart Crossley were married they
signed a pre-nuptial agreement stating that upon divorce they would
not seek claim to one another's assets. However, upon
separation, Sangster claimed that the agreement was null and void
as Crossley failed to declare "tens of millions" held in offshore
accounts. In December 2007 the Court of Appeal upheld the
agreement and Sangster tried to take the case to the House of
Lords. However, she backed out, therefore strengthening the
case of pre-nuptial agreements in the eyes of the UK courts.