In the run up to festive period (i.e. there are precisely 12 working days to until the many people depart for their holidays), BLM's Private Wealth practice will share here a  series of blogs demystifying elements of the legal process impacting individuals and families seeking legal remedies...

 

Two Turtle Doves

We all know that turtle doves are a symbol of love, friendship and devotion. They’ll stay paired together for a lifetime, which is the intention of many couples as they embark on their futures together.

For humans, it’s often less simple. Pre-nuptial agreements are on the rise.

In this second of BLM’s #12DaysOfChristmas #12DaysOfFamilyLaw we answer the question…

ARE PRE-NUPTIAL AGREEMENTS LEGALLY BINDING?

A pre-nuptial agreement is a legal agreement made between two individuals before they marry with a view to establishing the division of finances in the event of separation or divorce. With the Christmas season in full swing, what better time to consider how best to protect you and your family?

Are pre-nuptial agreements legally binding?

This is a question we get asked a lot. In short, pre-nuptial agreements are not legally binding in England & Wales. They cannot stop a spouse from applying to the court for financial provision from the other spouse and cannot stop a judge from deciding on the appropriate division of assets on divorce.

People are often surprised by our answer to this question, as the position is very different in countries close to us. For example, pre-nuptial agreements are legally binding in Austria, France, Greece, Luxemburg, Portugal and Sweden.

So why enter into a pre-nuptial agreement?

Whilst pre-nuptial agreements are not legally binding as such, they are a relevant circumstance of a case to be considered by a judge. In the Supreme Court case of Radmacher v Granatino [2010], the highest court in England & Wales made it clear that a court should give effect to a pre-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 the agreement. This essentially means that if a pre-nuptial agreement is drafted properly, it is likely to have a substantial impact on a judge’s decision in many cases.

What can I do to increase the likelihood of a court upholding the pre-nuptial agreement?

Breaking the judgement in Radmacher v Granatino [2010] down, parties entering into a pre-nuptial agreement should consider the following.

Is the pre-nuptial agreement freely entered into

 

  • Are the parties entering into a pre-nuptial agreement of their own free will without any pressure?
  • Do the parties feel that they are on an equal footing and freely able to negotiate the terms of the agreement?
  • Have the parties signed the pre-agreement as far in advance of the wedding date as possible and at least 21 days before the date?
  • What emotional state are the parties in at the time of drafting and signing the pre-nuptial agreement? How old are they? How mature are they? What relationship experience do they have?

 

Do the parties have a full appreciation of the implications of the pre-nuptial agreement

  • Have the parties received specialist independently family law advice from a solicitor in England or Wales?
  • Do either of the parties have a connection with another country and if so, has that party received specialist independent family law advice from a solicitor in that country?
  • Do the parties have all the relevant information material to their decision?
  • Do the parties intend to be bound by the terms of the pre-nuptial agreement?

Is it fair to hold the parties to the pre-nuptial agreement

  • Has the pre-nuptial agreement provided for the reasonable requirements of any child or children of the family? If the answer is no, it will not be considered fair.
  • Does the pre-nuptial agreement leave one party in a state of real need, whilst the other party is comfortably provided for? If the answer is yes, it is unlikely to be considered fair.
  • The longer a marriage lasts, the greater the chance the pre-nuptial agreement may not be fair because of unforeseen changes in circumstances, for example the birth of a child, bankruptcy, or long-term illness of one party. It is therefore prudent to include a review clause in the pre-nuptial agreement that triggers a review of the terms upon a significant change in circumstances.

General

If a pre-nuptial agreement is drafted properly, it is likely to have a substantial impact on a judge’s decision in many cases and is therefore an extremely effective tool in wealth protection. It is therefore very important to seek specialist independent family law advice from a solicitor to have the best possible chance of your pre-nuptial agreement being upheld.

Yasmin Khan-Gunns

Who to contact

Grainne
Fahy

Partner , London

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Yasmin
Khan-Gunns

Solicitor , London

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