Following on from last week’s Instagram Live with Head of Family Charlotte Knappett and Partner Richard Busby, Richard covers some more aspects of this subject in detail below.

 

Although common practice for many years in mainland Europe, where they are mainly used to displace default statutory regimes, English courts traditionally held the view prenuptial agreements were not enforceable.

 

That view gradually shifted over the years from the 1980s but the significant shift came in 2010, when the Supreme Court heard the landmark case of Radmacher v Granatino.

 

This was the first time the Supreme Court in this country got to grips with the issue of pre-nuptial agreements and the case is still, some 14 years later, the leading judgment, recited in part in almost every pre-nuptial agreement.

 

English courts now take the view that although the court will always retain  final jurisdiction, judges must assume that each party to a properly negotiated agreement is a grown up and able to look after him or herself. It follows that when parties enter a pre-nuptial agreement, they must do so on the basis that they intend to be bound by the consequences.

 

Prenuptial agreements can provide certainty and relief and provision where it is needed.

 

Clients are increasingly realising the benefits but they are important documents to get right. They are a very different beast to a ‘commercial’ transaction, given the emotional involvement of the parties and the Courts are alive to the risk of unfair exploitation for example when there is a superior bargaining position.

 

What do the courts look for?

 

The substantive judgment of the majority of the court in Radmacher sets out the following succinct proposition, well known to family lawyers;

 

“The Court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement”

 

When considering what factors may affect the validity of an agreement, amongst other things the Courts will look at whether;

 

  • the agreement is fair, taking into consideration all of the circumstances.
  • both parties exchanged at least a schedule of their full disclosure of all their material assets beforehand;
  • each party had legal advice (or at the least, the real opportunity to do so);
  • there was any undue influence
  • the timings were appropriate

 

The courts will look at timings and the circumstances of signing also – i.e. was the agreement concluded in a dire rush amid family pressure? Did the parties have the ability to properly understand the ramifications of what they were signing and whether there was a fair amount of negotiation and time.

 

The Law Commission guidance has been adopted by the courts and practitioners to provide for a minimum recommended period of 28 days between signing the agreement and the date of marriage. In some cases the period should be greater.

 

The importance of the circumstances of signing an agreement will vary from case to case but the more complicated the facts and finances, the more sensible it is to have a longer period of time than even the guidelines provide.

 

Some keys to a successful agreement

 

  • Plan for time

 

This cannot be emphasised enough. Start the process well before marriage to leave a sufficient gap in time. The more complicated the finances and the terms the longer should be allowed for negotiation and drafting.

 

There is often far too much to be concerned about in the run up to a wedding without having the stress of attending on solicitors.

 

  • Fairness and Needs

 

It is critical to make sure your agreement makes sensible provision in all of the circumstances. If not, the courts may strike out all or part of it in the event it is later challenged.

 

It may follow that in some cases, no provision at all is needed but marriage creates rights to various financial claims and in seeking to cut across those claims with a pre-nuptial agreement, robust legal advice is required to produce a long-lasting and effective agreement.

 

Precisely what the adequate provision will be will vary from case to case and expert advice is essential. Consideration must be given to what financial resources and needs the less well-off party may have upon exiting the marriage. Some ‘crystal ball gazing’ will be required to look ahead to make sure the right provision is made.

 

  • Avoid the agreement becoming the problem

 

A one-sided or biased agreement may be appropriate but consider how it will sit with both parties for the future – will it actually become the source of enmity in future years?

 

The whole purpose of pre-nuptial agreements is to help a marriage endure by providing certainty by applying a cross-check of the law against the wishes of the individuals. A biased agreement may properly protect wealth but may also undermine a marriage and consideration must be given to the unhappiness of being locked into an ill-considered agreement working against the marriage.

 

  • Once entered, adhere to it and keep it reviewed

 

Adhering to an agreement is something that should have to be advised but it is. Avoid leaving the agreement on the shelf to gather dust. Most agreements will provide for reviews to be had in certain circumstances and cases have shown that it is important to review agreements regularly.   Perhaps even more regularly than the agreement may provide, depending on the change in circumstances.

 

  • Quality Legal Representation

 

As well as us representing you, the other party ought to be directed to the best legal advice affordable. The greater the experience and specialism of the other adviser, the better.

 

Summary

 

The cases show why it is vital to have the benefit of proper legal advice at the earliest opportunity. A professionally drawn and fair agreement may save on later legal fees.

 

It is not only pre-nuptial agreements that benefit from this approach but post-nuptial agreements, pre-registration agreements for Civil Partners also.

 

At Fisher Jones Greenwood, our team of family law experts have a wealth of experience in dealing with all aspects of financial matters and will provide clear advice to guide you through this process. If you know anyone would like advice, please contact our Family Team by calling 01206 700113 or email [email protected].