Pre-nuptial Agreements

29 Sep 2009

Most people will know that a pre-nuptial agreement entered into prior to a marriage deals with family finances on separation or divorce.

In England and Wales pre-nuptial agreements have been held not to be legally binding. Notwithstanding that in the USA and most of the European countries, they are held to be valid.

However, following a recent decision in the Court of Appeal in the case of Radmacher -v- Granatino it is now considered that this decision is an endorsement of pre-nuptial agreements. Accordingly a pre-nuptial agreement will normally be binding on parties, save in the most unusual circumstances or where there are compelling reasons to disregard the agreement.

It is considered that there will now be a presumption that such contracts should be upheld and it will be down to the person who is trying to exclude themselves from the Agreement to show that it should be disregarded.

However, until parliament formally legislated on this matter, pre-nuptial agreements will retain uncertain status.

A party considering entering into a pre-nuptial agreement , should include the following matters in such an agreement:-

1. the agreement must be drawn up at least 21 days prior to the marriage
2. there should be full financial disclosure;
3. the agreement must not be unjust;
4. both parties need to obtain independent legal advice;
5. provision needs to be made for the children.

In view of the change of status of pre-nuptial agreements, parties now considering entering into marriage may wish to consider entering into a pre-nuptial agreement. There are clearly many cases where such an agreement would be useful, in particular to preserve family assets and in the case of a second marriage, to safeguard one or both of the parties' assets.

This article is by Richard Hill at Batchelors. Richard regularly advises on financial issues, please contact him on 0208 768 7041 or by email at rhill@batchelors.co.uk