Current Position
The current law regarding Pre Nuptial and Post Nuptial Agreements (collectively known as Nuptial Agreements) has been clarified following a high profile case in the Supreme Court involving a wealthy German heiress and her husband, who is a French millionaire; Radmacher v Granatino [2010] UKSC 42.
In this case, the Supreme Court confirmed that appropriate weight should be given to the terms of a Nuptial Agreement and the Court should give effect to a Nuptial Agreement if meets a three-staged test, namely:
1. It was freely entered into by each party;
2. The Parties fully appreciated the implications of the agreement when they entered into it; and
3. It would be fair in the circumstances prevailing to uphold the agreement.
Consequently, a Nuptial Agreement cannot oust or override the Courts discretion to decide on the appropriate division of assets on a divorce. It will however, have a substantial impact on the Judge’s decision and as long as it meets the three stage test above, it should be presumed the agreement will be held to its terms.
Future Position
It should be noted, that this is not the end for Nuptial Agreements as on 27th February 2014, the Law Commission published a Final Report and Bill on Nuptial Agreements. They recommend legislative reform to make Nuptial Agreements that are in prescribed form, and adhere to certain safeguards, legally binding. The Agreements that meet the necessary criteria will be called ‘Qualifying Nuptial Agreements’. These Agreements will prevent the Court from making financial orders on divorce that are inconsistent with the terms of the Nuptial Agreement except:
- To meet either Party’s needs.
- In the interests of a child of the family.
The Government is currently considering its response to the Law Commission’s proposals and some of the proposed reforms may become law in due course. Accordingly, it is important to ensure your Nuptial Agreement complies with the suggested requirements for a Qualifying Nuptial Agreement as far as possible.
If you’re thinking about entering into a prenuptial agreement then we strongly advise that you speak to one of our lawyers to ensure that the Agreement has the best chance of holding up the scrutiny of the Courts.