Pre-Nups - what's the situation?

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Pre-Nups - what's the situation?

Helen Waite, Family

Recently the Supreme Court handed down their long awaited decision in Radmacher v Granatino, a case that has finally given clarity to the relevance of nuptial agreements.

Katrin Radmacher is the German heiress who asked her French husband, Nicolas Granatino, to sign a prenuptial agreement before their marriage in order to protect the family monies she had inherited. Eight years and two children later, the marriage ended in divorce.  Under the terms of the pre-nup, Mr Granatino was to walk away from the marriage with what he brought in, however he elected to challenge the terms of the agreement on the basis that it was unfair.

He was initially successful in persuading the court that a lump sum payment of £5.5 million be made to him on their divorce and in contravention of the terms of the prenuptial agreement.  However Karin Radmacher launched a successful appeal when it was decided that the pre-nup should be largely upheld, although Mr Granatino did still receive a settlement from his former wife, including a payment of almost £1 million.

Mr Granatino then sought to appeal this decision in very simple terms: that weight should not have been given to the prenuptial agreement and that the Court of Appeal should not have reduced the payment to him. The Supreme Court in a majority decision of 8:1 upheld the decision of the Court of Appeal and dismissed Mr Granatino’s appeal.

What happens now?

Pre-nups haven’t been legally binding in England before now, despite their status in many other jurisdictions, including Germany and France where the parties came from.  However this landmark ruling means that providing a prenuptial agreement has been entered into by both parties freely and without duress, with a full understanding of what they are signing and the long term implications (preferably having taken independent legal advice) and, importantly, that it is fair to hold the parties to that agreement, it will be binding.

Essentially, the presumption will be that pre-nups will be considered binding unless they are blatantly unfair or unless they prejudice the children of the family.

It’s easy to think of pre-nups only being valid for the rich and famous, but the simple fact is that if you are bringing any assets to a marriage, whether your own or inherited, you should be considering a pre-nup.  It is particularly relevant for a very common ‘modern society’ situation, where people enter into second marriages but want to protect their wealth for their own children.

The Law Commission is due to report in 2012 on whether the law should be changed to ensure pre-nups are fully enforceable, but it would appear that circumstances have overtaken the process of legal reform.

Published: 30 Nov 2010

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