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Pre-Nuptial Agreements – Are they worth the paper they are written on?

May 30, 2013 Speech Box

A lot of family solicitors got themselves in a bit of a tizzy about the Supreme Court judgment in the case of Radmacher –v- Granatino which was heard in 2010 and dealt with the effect of a pre-nuptial agreement in divorce and financial proceedings.

Everyone thought that as a consequence of this case our judges would be more inclined to give effect to the terms of a pre-nuptial agreement than they had before. Lord Phillips said in this case that “the court should give effect to a nuptial agreement that is freely entered into by each party with the full appreciation of it’s implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement”.

In that case the judge did uphold the pre-nuptial agreement, but there is a feeling amongst those of us that specialise in family law, that subsequent decisions have diluted the effect of this judgment.

The courts have suggested certain guidelines that should be followed in order to give a pre-nup the most weight. These are:-

  1. The full and frank financial disclosure by both parties. There are no set rules regarding the format that this disclosure needs to take but if it subsequently turns out that there has been a material non-disclosure of a significant asset then it is likely that the pre-nuptial agreement will not follow.
  2. It is also important that both parties receive independent legal advice from solicitors from different firms who specialise in family law.
  3. The courts have considered that pre-nuptial agreements should be signed at least 21 days before the wedding date so that there is less chance of undue pressure being placed on either the bride or groom because wedding invitations have already been sent out etc.
  4. It is important that both parties fully understand the consequences or potential consequences of such an agreement and if the agreement was entered into by either party under duress, or if there was fraud or misrepresentation then it will not be of any force or effect. Ultimately the judge still has a discretion on dealing with the finances in divorce and no judge can be bound to follow an agreement entirely if it would be unfair to uphold its terms. So if an agreement unfairly prejudices the position of the children of the family then a judge will not enforce it.
  5. It is unfair to uphold the agreement if it leaves either the husband or the wife in a very dire financial predicament in contrast to the other.

What does all this mean?

Well, I think it means that we are still in very uncertain territory when it comes to pre-nuptial agreements and the significance or weight that will be attached to them in the event of a subsequent divorce.

Despite this we have noticed a marked increase in the number of people contacting us to obtain advice on pre-nuptial agreements.

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