A recent Court of Appeal ruling over a pre-nuptial agreement has put them back in the spotlight.
Ms Katrin Radmacher had drawn up a pre-nuptial agreement in Germany stating that her husband would not make a claim on her personal fortune if they divorced. The Court of Appeal upheld the pre-nuptial agreement and overturned an earlier award of £5.8 million of her fortune to her ex-husband.
However, pre-nuptial agreements are not legally binding in England and Wales, even though courts seem to be more willing to take pre-nuptial agreements into account. In the case of Crossley v Crossley, Mrs Crossley signed a pre-nuptial agreement and both husband and wife had had independent legal advice but Mrs Crossley tried to argue the pre-nuptial agreement was not enforceable because her husband had not made full disclosure of his assets. The Court of Appeal held that the pre-nuptial agreement was enforceable as detailed disclosure of the husband’s assets was not necessary. The Count took into account the fact that both spouses were wealthy, it was a short marriage, there were no children involved and Mrs Crossley would not have achieved a better financial settlement if the pre-nuptial agreement had not existed.
For a court to consider a pre-nuptial agreement, both spouses or civil partners must have had independent legal advice, there should have been full financial disclosure and pre-nuptial agreements should be signed some time before the marriage or civil partnership. This delay between the signing of the pre-nuptial and wedding or civil partnership is so that, if there is any dispute, one spouse or partner cannot argue they were forced to sign the pre-nuptial agreement under threat of the wedding or civil partnership ceremony being called off.
Pre-nuptial agreements are used by couples to set out their rights and obligations over property and/or finances if their marriage or civil partnership is dissolved. Where one partner or both partners has a child or children from a previous marriage, a pre-nuptial agreement can protect any monies set aside for that child, eg money towards further education, so it is not regarded as an asset of the marriage to be divided between spouses. If these arrangements have been set out in a correctly drawn-up pre-nuptial agreement, then it is more likely that a court will use the pre-nuptial agreement as guidance when deciding how finances should be divided on divorce or dissolving a civil partnership.
In drawing-up a pre-nuptial agreement, care must be taken that any future events that may need to be taken into consideration should the couple later separate are allowed for. Reports suggest the actor George Lazenby has applied to a Californian court, where pre-nuptial agreements are recognised, to get his pre-nuptial agreement set aside because he did not foresee that his former wife and tennis star Pam Shriver would be worth significantly more than him at the time of signing the pre-nuptial agreement. If his pre-nuptial agreement is not overturned, he will be blocked from filing a claim for spousal maintenance.
Care must also be taken that any future children are allowed for in the pre-nuptial agreement. For example if a couple have children after marrying and later separate but the pre-nuptial agreement does not outline what financial arrangements should be made for the children, then the court, who have to act in the best interests of the children, would most probably set aside the pre-nuptial agreement. Initially it was reported that Peter Andre had signed a pre-nuptial agreement when he married Katie Price. Katie Price has a son from a previous relationship and the couple have had two children of their own. If the pre-nuptial agreement did not include arrangements for contact or financial arrangements for any future children, it may be set aside so the court can consider the best interests of the children. Similarly if a couple in a civil partnership decide to adopt children but later separate and the pre-nuptial agreement did not include arrangements for the adopted children, the court would give priority to the children’s needs over the pre-nuptial agreement.
This is why it is strongly recommended that couples interested in drawing up a pre-nuptial agreement seek legal advice before doing so. At Lawson-West we will advise you on any potential future problems your pre-nuptial agreement may have and suggest solutions according to your personal circumstances. If you wish to discuss pre-nuptial agreements, please contact Alistair Dobson on 01858 445480 now or complete one of the on-line forms.
