Pre Nuptial and Post Nuptial Agreements

The Legality of Pre-nuptial and Post-nuptial Agreements

There has been much debate on the legality or otherwise of Pre-nuptial Agreements.  The main objection in the past has been on public policy grounds.  The main question that arises is how the Courts will approach such an agreement if the relationship breaks down.  Despite such agreements being legally enforceable in many European countries this is still not the case here, despite the high profile case of Radmacher and Granatino.

The Supreme Court ruled in favour of pre-nuptial agreements in Radmacher and although they are still not legally binding, the highest court in the land has agreed that in the right case such an agreement can be decisive and even compelling.  There will however need to be a change of law to make pre-nuptial agreements fully enforceable and the Law Commission is due to report on this in 2012.

The judgement in Radmacher and Granatino was handed down by a majority of 8 to 1 in the Supreme Court on the 20th October 2010.  This was an appeal by the husband, Mr Granatino, against the Court of Appeal decision to reduce the amount he was to receive in the divorce settlement.

Ms Radmacher was a paper company heiress and Mr Granatino was a French investment banker who later took a substantial reduction in his income to become an Oxford University researcher.  The parties signed a prenuptial agreement in Germany in 1998 and spent most of their married life living together in Chelsea, until their divorce in 2007.

The agreement provided that Mr Granatino would not make any claim on his wife's fortune if they split up, but was initially awarded £5.85m by the High Court in 2008.

Ms Radmacher challenged this in the Court of Appeal and it was agreed that the couple's pre-nuptial contract should have been taken into account and the award was reduced from £5m to £1m, Mr Granatino also received a £2.5m fund for a house, which would return to Ms Radmacher when the younger of their two daughters reached 22.  Ms Radmacher is reportedly worth in the region of £100m.

Pre-nuptials are not just for the rich but can allow you to ring-fence part of your wealth prior to marriage and this may be particularly important for second marriages where a person wishes to protect their wealth for the benefit of their children.

It therefore appears that the Court will now up hold pre-nuptial agreements if they are fair and if they are entered into without duress and with both parties being fully aware of all the relevant financial information and the consequences of signing the agreement.  The Court will however still have the discretion to waive the agreement especially if it is unfair to any children of the marriage.

This case now brings us more in line with other European countries where such agreements are enforceable.  There is however a concern that the financially weaker party may lose out on a considerable part of the couple's wealth.

Civil Partners - The main point to make in respect of civil partners is that in many cases, there will be no children and as a civil partnership is part of statue and not common law there has always been an argument that there may be less objection on public policy grounds to a pre-registration agreement being upheld in full or part.

Post-nuptial / post-registration agreements are entered into after a party's marriage or civil partnership and can again be considered by the Courts when a relationship breaks down.The Courts have recently been more willing to uphold a post-nuptial agreement on the basis that a couple should be free to enter into whatever agreement they choose whilst married and on an equal footing.

For more information, please contact our Family Law Team.


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