How binding is a prenuptial agreement?

Katie Beaven, a solicitor at Barker Gotelee, explains how English courts are taking greater account of prenuptial agreements

Katie Beaven, a solicitor at Barker Gotelee, explains how English courts are taking greater account of prenuptial agreements

MARRIAGE is a contract, and as with all contracts it should not be entered into lightly or without regard for the consequences. Hardly a romantic thought is it?

Unfortunately for many couples, the contract results in divorce. With divorce comes expense; unless a husband and wife can agree financial division, disputes arise. Disputes are costly and can mean that a husband and wife spend a large amount of their matrimonial pot on legal fees.

One way to avoid a lengthy and costly dispute could be to enter into a Prenuptial Agreement. Whilst not enforceable under English law, the courts have started to recognise their use and have in some cases held parties to their terms.

Prenuptial Agreements can be used in straightforward and/or more complex financial situations. Often where the assets have been acquired before the marriage, or where there are children from previous relationships, there will be a great desire to retain assets in sole names.

Case law over the last few years shows the courts are more and more persuaded to adhere to the terms of a Prenuptial Agreement when making a financial order. However, there must be certain safeguards in place to protect both the husband and wife's positions. These safeguards were confirmed in a case called K v K in 2002.

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In coming to his decision the Judge emphasised the following:

n Both the husband and the wife received independent and competent legal advice;

n Neither party were under any pressure to sign the agreement;

n There had been full and frank financial disclosure of their respective assets; and

n There had been no major change in circumstances to make the terms inappropriate.

The latest case in the papers is Granatino, which focused upon how a pre-nuptial agreement entered into by a German heiress and her wealthy French husband should be regarded in the English courts. Pre-nuptials are binding in the German and French courts and the court took this into account. The court confirmed that they are not binding in this jurisdiction, but it found the Granatino agreement to be persuasive and a major influence on the overall outcome of the case.

Each case will be decided on the basis of its own facts but what is clear, is that provided the above safeguards are present, there is a good prospect of the court keeping to the terms of the agreement.

Whilst no one enters into a marriage expecting the outcome to be a divorce, it is wise to consider a Prenuptial Agreement. It may prove to be an essential document, which protects the inheritance of the next generation.