January 2011 - Are pre-nuptial agreements now legally binding?- Wansbroughs Solicitors in Wiltshire, Devizes, Melksham

Are pre-nuptial agreements now legally binding?
January 2011

In this issue:

•	December 2010 - Lifetime Gifts
•	November 2010 - Making financial or welfare decisions for someone without capacity
•	October 2010 - The Cost of a Good Education

Until recently there was a great deal of confusion about the status of pre-nuptial and post-nuptial agreements in the Courts and whether they were binding on a divorce. The recent case of Radmacher v Granatino in the Supreme Court has substantially clarified the position.

Under a pre-nuptial agreement a couple set down, before they marry, how their assets should be divided between them should they decide to part. A post-nuptial agreement is a similar agreement which the couple makes during the course of their marriage. The term 'nuptial agreement' incorporates both these types of agreement.

Before the Radmacher case the presence of a nuptial agreement was merely one of a number of factors to be taken into account by a Court determining the division of assets. Such agreements did not bind a Court and parties could not be sure how much weight or significance if any would be attached to a nuptial agreement.

In Radmacher the Supreme Court decided that this type of agreement should be upheld where both parties enter into the agreement freely and fully appreciating its implications. However, the Courts will still retain the power to vary the agreed division of assets where it would be unfair to hold the parties to their agreement.

The judgment did not define 'unfair' but it is thought that the passage of time or the happening of unforeseen events could for instance make a nuptial agreement unfair. Examples of where an agreement could be unfair might include the situation where one party has given up work to care for a child whilst the other has been able to continue earning or where the proposed distribution will force one party to rely on state support. In addition, the presence of a nuptial agreement will not affect the Court's jurisdiction to make reasonable provision for any children of the marriage.

To help avoid this type of problem parties may wish to consider making specific provision for the birth of children in the original nuptial agreement. They should also review their nuptial agreement every few years or whenever circumstances change to ensure that it continues to meet their needs and reduce the likelihood that a Court will find it has become unfair.

Although not strictly required by the Radmacher case, to increase the chances of a nuptial agreement being upheld we would strongly recommend that both parties seek independent legal advice and make a full and honest disclosure to each other of their respective assets. We would also recommend that any pre-nuptial agreement be completed at least six weeks before the date of the marriage.

As a result of Radmacher it appears that nuptial agreements will now be given decisive weight by the Courts. However, the parties will still be free to apply to the Courts to vary the distribution and it will be for the Court to determine whether the nuptial agreement is fair.

The Law Commission is currently looking at this area and is due to report with its proposals in 2012. It has been suggested that the end result will be legislation formalising the status of nuptial agreements and excluding the Court's discretion to vary such agreements. In the meantime, although nuptial agreements have been given a more secure footing, a degree of uncertainty remains.

For further advice or assistance please get in touch with Alan Ciechan alan.ciechan@wansbroughs.com or Adrian Northall adrian.northall@wansbroughs.com.

December 2010 - Lifetime Gifts

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November 2010 - Making financial or welfare decisions for someone without capacity

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October 2010 - The Cost of a Good Education

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January 2011 - Are pre-nuptial agreements now legally binding?

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