Several years ago, our Jeremy Tier wrote an article about pre-nuptial agreements in the wake of a landmark judgement. The case involved Katrin Radmacher, a German millionairess, successfully relying on a pre-nuptial agreement to protect her £106 million fortune following her marriage break up. The case generated a lot of column inches in the legal press but, ultimately, it passed much of the public by unnoticed.
The intervening period since the Radmacher case has seen further court decisions on pre-nuptial agreements not to mention a rather hefty Law Commission Report and over the past year, however, we have seen a increase in clients enquiring about pre-nuptial agreements.
The Law Commission recommended that pre-nuptial agreements should be binding subject to stringent qualifications. In effect, it built upon the framework established in Radmacher and successive court cases.
It has long been a criticism of divorce law that there are few certainties about what will happen to a couples’ finances upon divorce. At present, there are guidelines based upon a 40 year old law. Most people would consider the advent of certainty a welcome development!
Are pre-nuptial agreements only for the wealthy?
This is a common myth. Engaged couples often make asymmetric contributions when buying property before they marry. Likewise, couples on second marriages may have assets from previous marriages that they are keen to protect. In addition, some individuals have significant family or inherited assets that they would want to keep in the sad event that they divorce. Arguably, a pre-nuptial agreement is the best way to provide these couples with certainty and it is hoped that pre-nuptials will become more common bringing us in line with the US and European countries.
Elements of a binding pre-nuptial agreement
The Law Commission laid out conditions for pre-nuptials to be considered binding. In a nutshell:
- Both parties must have received independent legal advice.
- Both parties must have disclosed all of their relevant financial assets.
- The agreement must be made at least 28 days before the wedding.
The parties to a pre-nuptial agreement should bear in mind that signing an agreement does not necessarily exclude their ability to go to court but it is hoped that the surety of an agreement may reduce costly and lengthy divorce litigation.
If you would like more information or to discuss your specific requirements, please contact one of us: