Examining the Enforceability of Irish Pre-nuptial Agreements – Áine Horgan
Pre-nuptial agreements are typically executed to protect assets prior to marriage and become operational in the event of a marriage breakdown. Ross Alyward has stated that pre-nuptial agreements are drafted to not only consider the course of a marriage, but also to regulate the termination of a marriage. Whilst we normally associate pre-nuptial agreements with the protection of property, assets or inherited gifts, they can be utilised in contemplation of other eventualities that may possibly arise in the course of a marriage – Catherine Zeta Jones and Michael Douglas have a pre-nuptial agreement which attempts to prevent, or at least punish infidelity. Nicole Kidman and Keith Urban have a pre nuptial agreement that comes into effect should Urban’s addiction issues reoccur.
Pre nuptial agreements are enforceable, but not automatically binding under Irish law unless they comply with the financial inter-spousal obligations demanded by the courts upon divorce, for example, proper provision must be made for dependent spouses upon the breakdown of a marriage. The Family Law (Divorce) Act 1996 provides a legal framework for marital breakdown, introducing divorce and removing the lifelong aspect of marriage, and indeed any argument that a pre nuptial agreement pre-empting a breakdown would be contrary to public policy. However, current public policy prevents a clean financial break on divorce, and by requiring that dependent ex-spouses are entitled to proper provision following marriage breakdown, ensures that pre nuptial agreements will be set aside if its terms do not sufficiently provide for the more vulnerable spouse and dependent children, meaning the impact of pre nuptials at present, is very much determined on a case by case basis.
The C.S.O in Ireland estimates on 2016 figures that divorces here have increased by one fifth since 2011, bringing the rate to approximately 13%. Surely it is time that these agreements should be placed on a more concrete statutory footing in this jurisdiction?
Unknown to most people, Irish courts have been obliged since 1965 to take pre-nuptial agreements into consideration, as the Succession Act includes a section allowing a spouse to waive his/her legal right share on the death of his/her spouse, primarily with a view to protecting the family farm. However, courts are not mandated to give pre-nuptial agreements full effect if they are grossly unfair. Farmers and business owners have long lamented that more robust protection is not available to allow them to protect their assets should marital break down occur within the family. Under Irish law, as it currently stands, a family business, farm or inherited asset which has been in a family for generations may have to be sold to provide for a spouse if a marriage has ended. A study conducted amongst 1,000 farmers by Farmland.ie in April 2017 revealed that 72% were in favour of marital pre nuptial agreements becoming strictly enforceable.
Recent census figures also identify an increase of just over 17% in the number of people getting remarried. Almost 30,000 men and nearly 21,000 women over the age of 45 were in second marriages in 2016. Presumably many of these people possess assets and wealth that they want to protect in the event of their death in favour children, or even grandchildren, from previous relationships. Under current law, the succession entitlements of a second spouse will take priority, and in comparison, any children of the deceased only have very meagre protection. They have a right to apply to the court if they can prove that they were not appropriately provided for during the lifetime of their deceased parent.
Many Irish couples undertake pre marital courses prior to their big day, it might be sensible to at least encourage couples to contemplate signing a prenuptial agreement prior to marriage, in a manner similar to how couples are mandated to consider the option of mediation, prior to issuing divorce proceedings. Some might argue that a policy shift to a system where pre-nuptial agreements have to be considered by couples prior to marriage could be construed as encouraging divorce, however it could equally give both parties great reassurance, especially where there is a large imbalance or wealth and or assets between the parties.
Including a sunset clause in the agreement would compel the couple to revisit their pre-nuptial agreement at various junctures throughout the marriage (for example every five or ten years), allowing the pre nuptial agreement to evolve to reflect the changing needs and circumstances of the couple and any children they might have. Indeed recent judicial pronouncements suggest a growing reluctance to interfere with family assets or inherited gifts when determining what orders are required to make proper provision for a former spouse. This policy shift might apply to pre-nuptial agreements, should a case come before the courts for adjudication. In the recent Irish divorce case G v. G, the court stated that it would not view inherited assets in the same way as it would treat assets accumulated by the couple during the course of the marriage.
In 2017, with the current divorce rate of 17% on the increase it might finally be time to afford better respect to the private choices of couples and allow their pre marital views to have more influence on the divorce process without perhaps completely binding them to an agreement that is either grossly unfair or does not reflect changes in circumstances that may have occurred during the course of marriage.