The criteria for a valid nuptial agreement: predicament of real need

Predicament of Real Need in Nuptial Agreements

A nuptial agreement may not be upheld by the court if it leaves one party in a “predicament of real need” - situation where their basic financial needs are not adequately met.

How Do Courts Define “Need”?

When assessing needs in the context of a nuptial agreement, courts apply a less generous standard than in typical financial remedy proceedings. In standard cases, the court considers the couple’s marital lifestyle. With a prenup in place, the focus shifts to whether the agreement meets basic, essential needs. 

Key case law

In WW v HW [2015] EWHC 1844, the nuptial agreement was not given effect by the court as it did not make sufficient provision for the husband’s need. However, it was given significant weight, and the judge justified a relatively narrow interpretation of the husband’s needs due to multiple factors. Namely, the husband had received significant legal advice and was found to have understood the implications of the nuptial agreement. Notably, this case was perhaps a bit unusual, as it is likely that the nuptial agreement did not include provisions for the husband’s needs as he had exaggerated his income, which downplayed his needs. When considering the husband’s needs, the judge found that “fairness will not necessarily equate to near destitution” and that needs must be assessed in light of all of the circumstances of the case. 

However, a nuptial agreement may still be upheld if it meets a lower threshold of needs, even if the court would have awarded a higher needs-based settlement if there was no agreement in place. 

In Kremen v Agrest (No.11) (Financial Remedy: Non-Disclosure: Postnuptial Agreement) [2012] EWHC 45 (Fam), Mostyn J stated that “‘need may be interpreted as being that minimum amount required to keep a spouse from destitution”. Likewise, in Cummings v Fawn [2023] EWHC 830 (Fam), he indicated that where there is a nuptial agreement, it should only be departed from based on need if it only provides the applicant with “a spartan lifestyle catering for not much more than essentials”. The extent to which the court can provide more than this, is at the court’s discretion. To illustrate the range of outcomes that the court may accept, Mostyn used the metaphor of “a line of books on a shelf bracketed left and right by book-ends”, with the left side representing the least generous acceptable outcome, and the right side representing the most generous. He held that if the result of a nuptial agreement fell somewhere in-between this range of acceptable outcomes, it should be given effect by the court.  

However, in AH v BH [2024] EWFC 125, Peel J held that he did not interpret Mostyn J’s statements as meaning that every case should be assessed in such a restrictive way. The assessment taken will be fact specific. In this case, Peel J departed from the nuptial agreement due to the following factors: 

• The wife had been, and was continuing to be, the primary caregiver of the couple’s children. 

• Over the course of the marriage, the wife had become less independent, with no assets of her own and a heavily diminished earning capacity. 

• The nuptial agreement stated that it would be reviewed upon the couple having children. This review did not occur, and the clause indicated that the couple foresaw the agreement becoming unfair once they had children. 

• Requiring the wife to leave the property once their children finished tertiary education would be unfair. Given her lack of assets and diminished earning capacity, she would suffer heavily reduced financial circumstances. It would also be unfair to run the risk of the children seeing this, whilst their father is far wealthier.  

• Peel J held that the wife may have been awarded a larger settlement without the nuptial agreement. He held that his decision struck a fair balance between giving sufficient weight to the nuptial agreement and ensuring the wife’s needs were met.  

Therefore, AH v BH shows that a nuptial agreement may not be given effect even if it would not cause a party to be at risk of destitution, or a lifestyle where they can only afford the essentials. A further key takeaway from this case is that parties should ideally review their nuptial agreement following any children, particularly if the agreement states they will do so.  

Key Takeaways

• A nuptial agreement may be set aside if it leaves one party in a predicament of real need
• Courts assess need less generously when a prenup is in place
• Fairness is fact-specific and considers the parties’ roles, vulnerabilities, and future needs
• Agreements should be reviewed after major life events, such as having children

If you have signed a nuptial agreement which does not sufficiently meet your needs, contact Vardags today for a free initial consultation with one of our expert divorce solicitors. 

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