Pre-Nuptial/Pre-Marital Agreements

A Pre-Nuptial Agreement “Pre-nup” is a binding agreement which is entered into before marriage and can be legally enforced if the parties later divorce.  Until recently “Pre-nups” were given greater weight than had previously been accorded to them but were not recognised as being binding under English Law and the relevance of them was limited to being one of the factors in the case which the Court could take into account as being part of all of the circumstances.

The Supreme Court decision in Radmacher (formerly Granantino) v Granatino was delivered in October 2010.

Prior to Radmacher whilst the Courts were more inclined to recognise the existence of such agreements there was still a significant issue as to their enforceability.  The decision in the Radmacher case goes a long way to resolving this.

The Supreme Court decided that in principle Judges dealing with financial claims on divorce should give effect to Pre-Nuptial agreements.  This is subject to provision that the agreement must have been clearly entered into by the parties with full appreciation of its implications

The Judge must consider whether or not it would be unfair to hold both parties to the agreement.

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The decision suggests that in terms of enforceability there is a strong but not absolute presumption that Pre-Nuptial agreements will be binding on the Court.

The Supreme Court themselves said that those who enter into Pre-Nuptial agreements will be considered to have intended their agreement to take effect.

This makes it easier for spouses to rely on agreements that keep specific assets outside a divorce settlement.

The decision stops well short of the almost automatic implementation of such arrangements in common with Continental Europe.

The Court retains the ability to scrutinise the agreements on a case by case basis.

The Supreme Court ruling it considered to be a stop gap measure pending the Law Commission which is due to report in 2012.  It is rumoured that the report of the Law Commission on the enforceability of Pre-Nuptial agreements will lead to legislation in respect of them.

“The Court should give effect to a Pre-Nuptial agreement that is freely entered into by each party with a full appreciation of its implication unless, in the circumstances prevailing, it would not be fair to hold the parties to their agreement.

There is likely to be an increase in the request for Pre-Nuptial agreements not only from the very wealthy but also from the increasing number of people entering into second marriages where they have accumulated assets and experience of reality of divorce and wish to be sure that arrangements can be made for proportions of their wealth to be retained in the event of the marriage failing.