Marital Agreements – Pre and Post Nuptials

The law relating to Pre (and post) Nuptial agreements in England and Wales is gathering apace and there have been a number of high profile cases which have reached the national news in the past few years.

Coupled with the countless number of US sitcoms and dramas on our televisions referring to the “Pre-Nup”, it stands to reason that wealthy individuals or perhaps those with inherited assets or pre-owned property will want to know how they can protect their financial interests should their forthcoming marriage ultimately break down.

Historically the courts had taken the steadfast view that pre-nuptial agreements were against public policy and so would not therefore be taken into account when deciding how to divide matrimonial assets. This changed in 2010 with the now well-known case of Radmacher v Granatino. The case has changed the approach in the courts and in the way that family lawyers advise prospective clients.

However it has also caused some confusion amongst the general public because pre-nuptial agreements are still not automatically binding, although they will now be considered by the courts as part of the wide-ranging discretion held by judges when deciding matrimonial cases.

Radmacher v Granatino involved two foreign nationals living in London; a wealthy German wife (Radmacher) and a French husband (Granatino) who had entered into a pre-nuptial agreement that would have been recognised in both Germany and France. Granatino raised a number of objections to the sustainability of the agreement including factors of non-disclosure of assets; the fact that he had not obtained his own legal advice; and also that he had not had the opportunity of having the agreement fully interpreted into his natural language.

The Supreme Court was of the decision that the agreement would be given considerable authority in the factors of the case and gave the following important judgement:

“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.”

A number of cases have followed Radmacher v Granatino in the past two years, which have sought to use the principles laid down in the Supreme Court, albeit in differing ways and in differing circumstances. Matrimonial lawyers and the court will always treat each case on its own facts, but there are relatively standard factors that lawyers and individuals need to consider when advising on marital agreements:

Both parties should take independent legal advice.

• There should be a good period of time between the commencement of advice on the agreement and the actual marriage. If any party feels under “duress” then the agreement may not be effective
• There should be full and frank financial disclosure of each parties means

However, even given these factors, an interesting point of the Radmacher judgement was Granatino’s own understanding of the agreement and his intelligence. The general consensus being that he knew what he was signing, knew that it would be enforceable in either his own or his wife’s country, and had sufficient intelligence to understand the implications.

This principle was followed in the later case of V v V (Pre Nuptial Agreement) [2011] in which it was stated that if the parties are aware of the implications of the agreement then they should not be able to rely on non-disclosure at a later date, if they did not take the time to check those assets when entering into the agreement. In this case the wife accepted that she would have still entered into the pre-nuptial agreement even if she had received legal advice and that she was not concerned about the value of the property in question at the time.

Therefore, the “worst case scenario” tells us that the wealthy individual wishing to protect assets should have explained to him/her that the agreement may not be binding and will be advised of the pitfalls of entering into a marital agreement; whilst the disadvantaged client will be told to expect the agreement to be upheld in circumstances where he/she understands the implications and provided that it is broadly fair.

When advising clients regarding marital agreements it is worthwhile to also consider the benefit of post-nuptial agreements. This is often something which will aid the uncertainty surrounding the enforceability of the pre-nuptial agreement. If there are clauses which allow for a post-nuptial review of the agreement, say every five years or in the event of a life-changing circumstance (the birth of a child for example), then this might avoid the situation where a once-fair agreement would become unfair at a later date.

There are many legal implications to consider when deciding whether or not to enter into a marital agreement and the principles also hold up for Civil Partnerships. Emsleys family law department have expert solicitors who are able to guide you on the law and the practicalities of such agreements and we are always happy to respond to any enquiries.