For Love or Money? A Focus on Pre Nuptial Agreements
Pre nuptial agreements (affectionately referred to as ‘Prenups’) have recently been catapulted into the news with the press declaring that they are now binding, following the widely reported Supreme Court decision of Radmacher.
The truth behind the headlines tells a somewhat different story. The decision does not make Prenups universally binding but does provide clarity on the factors that the Court will take into account when deciding whether they should be upheld.
The principle to be applied is that the Court should uphold the terms of a Prenup entered into freely (with full knowledge of its implications) unless at the time of the divorce it would be unfair to do so.
Therefore, it is essential for Prenups to be properly prepared and implemented – to include each party entering into the agreement freely and without pressure (for example not at the eleventh hour), both sides receiving independent legal advice, and involve a full disclosure of the parties’ financial circumstances.
The Court will still ultimately have the power to review the fairness of the Prenup – and accordingly determine how much weight should be given to the agreement, and whether this is decisive or not.
The case of Radmacher will certainly assist our family department advising clients upon the benefits of entering into Prenups.
Although Pernups are not automatically binding it is still felt to be beneficial for the financially stronger party to have the protection of a Prenup – as they can be decisive. Prenups will be of particular benefit also to couples marrying later in life and for second marriages.
Did you know? Only in America… reported terms of Prenups are said to include an agreement by a husband only to watch Football games on one Sunday per season and for a wife to keep below an agreed maximum weight. Needless to say, this would not be enforceable in England and Wales!
