• All this talk of Pre-Nuptial Agreements does not actually affect us. The cases only deal with celebrities and very rich people. How can they possibly apply to us?
  • Drafting such an agreement will hardly be romantic for us.
  • What are the criteria for the agreement to be enforceable?
  • My future son-in-law is putting a lot of pressure on me to sign a Pre-Nuptial agreement. It must be because of his father’s wealth.
  • It is only a fortnight before our wedding – will this be a problem?
  • I do not really have any choice. It is a case of sign this or the wedding is off.
  • I had an agreement placed in front of me but no evidence of the extent of my future husband’s finances – which I think are extensive.
  • Is there likely to be any change in the law?
  • I might as well have one. If we separate, then we may have a written agreement that is binding. If it is not, we have not lost much and have simply tried our best.
In England and Wales, Pre-Nuptial Agreements are not automatically enforceable by virtue of an Act of Parliament. However, due to the Supreme Court’s recent decision in the case of Radmacher v Granatino 2010, a Pre-Nuptial Agreement is likely to be upheld by a court on divorce, provided that the parties have entered into the agreement freely, they fully appreciate its implications and its terms are fair and do not prejudice the reasonable requirements of any children of the family.

The courts still retain discretion to make such financial orders as are considered appropriate on divorce but the decision of the Supreme Court means that the existence of a Pre-Nuptial Agreement will be taken into account in all the circumstances of the case and in the right case, it can carry decisive or compelling weight when the court is determining how to distribute the assets between the parties.

The courts discretion to vary or disregard a Pre-Nuptial Agreement will remain unless there is legislative reform and The Law Commission is currently preparing the report, which is due to be published in 2012, on the enforceability of agreements between spouses and civil partners. Nevertheless, it is clear following this recent decision that Pre-Nuptial Agreements are now more likely to be upheld than ever before.

Radmacher v Granatino

Ms Radmacher (the wife), who was German, married Mr Granatino (the husband), who was French, in London in 1998. The wife was from an extremely wealthy family and was also wealthy in her own right. The parties entered into a Pre-Nuptial Agreement at her request and this was signed in Germany. There was no disclosure of the wife’s financial circumstances, the husband did not have a translation of the document, which was in German, and he did not take independent legal advice on its terms.

At the time, the husband was a successful banker, earning a six figure sum. Under the terms of the agreement he waived his right to make any financial claims against the wife on separation.

The parties, who had chosen to live most of their married life in England, had two daughters and the husband gave up his banking career to become a student and later, an academic, earning substantially less.

After 8 years of marriage, the parties separated and the wife commenced divorce proceedings in London. The husband made a claim for financial relief, effectively ignoring the Pre-Nuptial Agreement.

The first court to decide the case awarded the husband £5.5 million; the purpose of which was to enable him to purchase a home and to capitalise his maintenance payments. The court found that the Pre-Nuptial Agreement was defective for a number of reasons, including the lack of disclosure and the fact that it was not translated. However, the husband was still awarded less that he would have received as he had signed the agreement freely.

The wife appealed, stating that the Pre-Nuptial Agreement should be given decisive weight. She was successful as the Court of Appeal reduced the husband’s payment to £2.5 million which was only to be available to him until the youngest child reached the age of 22, with maintenance continuing only over the same period.

The husband appealed to the Supreme Court who dismissed his appeal thereby upholding the Pre-Nuptial Agreement. In terms of the safeguards that should be applied, the court held that

‘The court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement.’

It follows that for a Pre-Nuptial Agreement to enforceable:

  • The parties must have entered into it voluntarily and so there must not be any duress or undue pressure.
  • It must not be inherently unfair, for example, lead to one party being left with insufficient resources to meet their needs.
  • It must not prejudice the reasonable requirements of any children of the family and hence the agreement should make provision for them. Indeed, it is recommended that the Agreement should be reviewed on the birth of a child so that appropriate provision can be incorporated.
  • Each party should have all of the relevant information which is material to make a decision about whether to enter into the agreement and should be informed of its implications.
Ideally, there should be full financial disclosure of each party’s financial circumstances and both should receive independent legal advice but what the Supreme Court has said is that the question is whether there is any material lack of disclosure, information or advice which should reduce the weight which is attached to the agreement. If one party is fully aware of the implications of the agreement and is indifferent about the other spouse’s resources, then the weight should not be reduced just because that party is unaware of the details of those assets.

In conclusion, the courts will look at Pre-Nuptial Agreements on a case by case basis and until there is legislative reform, retain discretion to disregard them although following the Supreme Court’s decision, this is now only likely to be in circumstances where the agreement is unfair, particularly to any children of the family.

At the moment, Pre-Nuptial Agreements are not widely used. When people are entering into a marriage or civil partnership, they do not like to consider the consequences of it breaking down. However, people are increasingly recognising, in particular where there are children from a previous marriage, that it is important to make their wishes about their present and future assets clearly known and have them detailed in an agreement. Many people who have already been through divorce before may prefer to achieve greater control over the divorce process in the event that they should find themselves separating once again.

It is preferable to have something in writing rather than nothing at all. An agreement fully sets out the position of you and your future spouse. In the event of your marriage breaking down then at best, it would be adhered to in full or in part. At worst, it would simply be discounted.

It is advisable to enter into an agreement well in advance of the ‘big day’. Bear in mind that before it can be signed, it is preferable for full and frank financial disclosure to be exchanged and the document has to be prepared and considered, with ideally, both parties having the opportunity to seek independent legal advice about its terms.

Very few solicitors specialise in Pre-Nuptial and Pre-Civil Partnership Agreements. Although they are becoming more popular it is still a relatively uncommon area of the law. At Blackdown Family Law Solicitors, we have extensive experience of drafting both types of agreements and would be happy to assist if you are considering entering into such an agreement.

Areas of Family Law Work
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