Commonly referred to as a prenup or pre nup, a pre-nuptial agreement is an agreement made between two parties prior to marriage. The agreement is designed to determine what will happen to the parties’ assets in the event that the marriage breaks down. Historically pre-nuptial agreements were not upheld because it was thought that such an arrangement was contrary to public policy. It was felt that it was not appropriate for those who wished to marry to make arrangements for the breakdown of that relationship when it was envisaged that marriage was a lifelong contract.
Over time case law developed and the Courts started to take pre-nups into consideration as one of the overall factors when they were making decisions about matrimonial finances. This meant that if a Court was being asked by a Husband or a Wife to make a decision about how the assets of that marriage should be divided the Court would consider the existence of a pre-nup as one of the overall factors to be taken into consideration.
Recent Case Law
Radmacher v Granatino was a much anticipated decision of the UK Supreme Court which has strengthened the effectiveness of pre-nuptial agreements. The decision by the Supreme Court found that the agreement entered by Mr Granatino and his very wealthy German Wife was binding.
This decision does not mean that all pre-nups are binding but the Court in the case of Radmacher did set out the circumstances which are likely to be necessary if the Court is to uphold a pre-nuptial agreement;
- There should be full and frank financial disclosure from both parties
- The parties must enter the agreement voluntarily, without any undue influence or pressure – for this reason it is important to begin work on the agreement well in advance of the wedding
- Each party should receive independent legal advice so that they understand the implications of the agreement that they are entering
- The parties must intend the agreement to be legally binding upon them in the event that their marriage/civil partnership breaks down
- The agreement must make provision for any children of the marriage
A pre-nup cannot prevent the Court from making a decision regarding the matrimonial finances in the event that the marriage breaks down. However the existence of a pre-nup may well influence the Court’s view on what might be considered fair. The Court will certainly look very closely at the circumstances surrounding the making of the agreement and for that reason it is important that the agreement complies with the list above.