What is a Pre -Nuptial Agreements?
an agreement that a couple enter into before they tie the knot which sets out how they have decided to split their wealth in the event of a divorce. How romantic. As well as arranging flowers, caterers, outfits, venue and music, there is one more crucial thing to arrange – an appointment with the solicitor to talk about a divorce – an eventuality that should not even be contemplated in the build up to a marriage. What a dampener. So why consider it?
Marriage is a difficult relationship. Even for the most optimistic of couples. Add money into the mix, then it can become a bitter cocktail hard to down. With greater numbers of people marrying after completing their education or building up a career in the workforce and thus having more assets, a need to protect that hard earned money has arisen. After all, what with divorce rates being so high, do you want your spouse to benefit from your wealth that they have made no contribution towards accumulating? Or do you want your spouse to enjoy the fruits of your family money from an inheritance or contribution towards your first home perhaps? Probably not. So, as unromantic as they seem, Pre nuptial agreements are actually a relief to most people from the very rich to us common folk.
When did Pre -Nuptial Agreements became popular?
Pre nups came into the limelight after the landmark case of Radmacher v Granatino in 2010. In this case, the couple married in London in 1998. The husband, Mr Grantino, was French and worked in banking while the wife, Ms Radmacher, was German and came from an affluent family. The couple made a pre-nup before marriage, but Mr Grantino didn’t obtain independent advice on the agreement. The marriage broke down in 2006 after 8 years of marriage and had produced 2 children. At the time of the divorce and subsequent financial proceedings, Mr Grantino had left banking and was working as a researcher. He applied for financial provisions and was awarded £5.5 million by the court. The agreement was taken into account but its weight was reduced in the final decision. Ms Radmacher appealed the decision in the Court of Appeal, where the agreement was given decisive weight. According to the judgement of the court, Mr Grantino should only be granted provision for his role as the father of the two children and not for his own long-term needs. Mr Grantino appealed to the Supreme Court, but the appeal was dismissed.
In the aftermath to this case, the Law Commission recommended that Pre Nups should become legally binding subject to stringent conditions which if met, would mean the ‘qualifying nuptial agreement’ would be given decisive weight in court. The Commission further proposed that such an agreement would only be enforceable after both partner’s financial needs, and any financial responsibilities towards children, have been met. So whilst it will remain open to spouses to make agreements about financial needs, such terms will not be contractually enforceable and will be subject to the courts’ scrutiny for fairness as they are at present. A qualifying nuptial agreement will not remove the parties’ ability to apply for, and the courts’ jurisdiction to make, financial orders to meet their financial needs.
Whilst the recommendations are still being considered by Parliament, british courts already give weight to a validly drawn up and executed Pre Nup which is prepared pursuant to the criteria recommended by the Commission. What are these?
- Full financial disclosure of both parties’ assets before the agreement is made; no assets should be hidden by either party
- Both parties must receive independent legal advice from different Solicitors
- The agreement has to have been signed no later than 28 days before the wedding
- The agreement must not be signed under duress or pressure by either party
Pre Nuptial agreements are not as un romantic as they may first appear and serve to be a practical effective way to arrange the division of your assets that suits you best. Anyone who has been through a divorce will be agonizingly familiar with the cost and delay inherent in the family courts and more importantly, the bitterness and acrimony that litigation creates. So why not avoid that and decide at the outset, who gets what? With that kind of certainty, embarking on the new journey of marriage should be a much clearer and happier process with no sign of divorce on the horizon.
If you need to discuss your matter with us, please contact our family solicitor on firstname.lastname@example.org for a consultation.