Are they legally binding?
Pre-nuptial Agreements are not legally binding in England & Wales – yet. They cannot stop a spouse from applying to the court for financial provision from the other spouse and cannot stop a judge from deciding on the appropriate division of assets on divorce.
Will a Judge consider them?
Whilst pre-nuptial agreements are not legally binding as such, they are a relevant circumstance of a case to be considered by a judge.
In the case of Radmacher v Granatino , the Supreme Court made it clear that a court should give effect to a pre-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 the agreement. This means that if drafted properly, pre-nuptial agreements are likely to have a substantial impact on a judge’s decision in many cases.
The Three-Stage Test
- A pre-nuptial agreement must be freely entered into:
- Parties must enter into a pre-nuptial agreement of their own free will without any pressure;
- Parties should feel that they are on an equal footing and freely able to negotiate the terms of the pre-nuptial agreement;
- Parties should sign the pre-nuptial agreement as far in advance of the wedding date as possible; and
- The court will consider the parties’ emotional state, age, maturity, relationship experience and such like at the time of making the agreement.
- Parties must have a full appreciation of the implications of the agreement:
- Parties should both receive specialist family law advice from a solicitor in England or Wales;
- If a party has a connection with another country, that party should receive specialist family law advice from a solicitor in that country;
- Parties should each have all the relevant information material to their decision. Full and frank financial disclosure is desirable; and
- Parties should intend to be bound by the terms of the pre-nuptial agreement.
- It must be fair to hold the parties to the agreement:
- A pre-nuptial agreement will not be fair if it does not provide for the reasonable requirements of any children of the family;
- A pre-nuptial agreement is unlikely to be fair if it would leave one party in a state of real need, whilst the other party is comfortably provided for; and
- The longer a marriage lasts, the greater the chance it may not be fair because of unforeseen changes in circumstances, such as the birth of a child or long-term illness of one party.
A recent example of the court giving no weight to a pre-nuptial agreement can be seen from the case of Ipekçi v McConnell . In this case the Wife is the great-granddaughter of the founder of Avon Products and the Husband is head concierge at a London hotel. The Wife has significantly more assets than the husband. The Wife is the beneficiary of trusts in the USA with an overall value of at least $65 million, whereas the Husband earns around £35,000 gross and his debts exceeded his very modest assets. The Judge decided to ignore the pre-nuptial agreement between them and made a financial remedies award in favour of the husband.
The Judge concluded that:
the Husband did not have a full appreciation of the implications of the agreement as
1) the Husband had not received legal advice about the impact of the law in New York despite the agreement stating that it would be governed by New York law and
2) evidence of the single joint expert was that the agreement suffered from a fatal defect under New York law, and
3) the Husband had been advised by a solicitor who had acted for the Wife in her previous divorce; and
- It would not have been fair to hold the Husband to the pre-nuptial agreement. The terms of the agreement meant that the Husband would receive nothing on divorce and hence his needs had not been met.
If you would like more information on pre-nuptial agreements, please call a member of our Family Law team who would be happy to assist on 020 7228 0017.
Hanne & Co