Pre-nuptial agreements

For our most recent views on pre-nuptial agreements please see “Why Pre-Nups are so Tricky”.

In a long-awaited ruling, the UK’s Supreme Court has ruled that a pre-nuptial agreement may be decisive factor when considering entitlement in a divorce.

The case of Radmacher v Granatino effectively now sets out the circumstances under which pre-nuptial agreements are likely to be taken seriously.

In the past, there has been reluctance to enforce such agreements so these events are a clear signal that the Courts is changing its understanding of the nature of marriage and the rights of individuals to protect the assets they bring into a union in the event of a break-up.

As a result, it is inevitable that prenuptials will be considered by more couples before they marry.

Financial entitlement after divorce has long been an area of real uncertainty. The Court looks at various criteria set out in statute, and broadly speaking comes to a decision as to what it regards as ‘fair’ in the circumstances. But of course opinions about fairness will differ depending on your perspective, which means that it is often difficult to predict who gets what after divorce with any great certainty.

The law can be particularly unpredictable after a short marriage – under the current laws, even after a marriage of say three to five years, a wealthier partner can stand in some circumstances to lose a large portion of the assets they brought into the marriage. It is often the case that couples are not aware of this possibility beforehand.

One way of reducing some uncertainty is to consider a pre-nuptial agreement. The Courts will of course, still have to take into account changes in circumstances (for example, the birth of children). But if the agreement is drafted thoughtfully and with good legal advice, it is more likely now to be persuasive to a divorce Court if not actually conclusive in the event of a marriage breakdown.

Contact Jane McDonagh
jane.mcdonagh@smab.co.uk