This blog will detail the weight given to prenuptial agreements (prenups) when going through divorce proceedings. This blog is purely advisory, before entering into a prenuptial agreement you should always seek independent legal advice.

What is a prenup?

A prenup is first and foremost, a contract. This is entered into by both parties to the marriage concerning the distribution of assets and finances if the parties were to divorce. A prenup is entered into before the marriage occurs, although if the parties wish, they are able to have a post nuptial agreement drawn up during the marriage.

Why should I sign a prenup?

There is still some negative stigma surrounding the use of prenups, but it must first be remembered that signing a prenup does not mean that you and your partner will divorce in the future. Prenups are important to protect the independent assets that you bring into a marriage. If you will bring in significantly more into the marriage and do not have a prenup, it is assumed that your partner will be entitled to 50% if you divorce.

When are Prenups relevant?

Prenups are relevant only on divorce when looking at the distribution of finances and assets. It means that the distribution of finances and assets are on you and your partners terms instead of leaving it all down to the courts.

Do the courts look at prenups?

After the landmark case of Radmacher v Granatino [2010] the courts generally recognise and uphold prenups if they meet the criteria. Although prenups do not have automatic application, they have significant influence on the decisions of the courts.

What does a prenup have to contain?

Under both a Law Commission Report and a Government Green Paper, a prenup is not binding if:

• a child is born during the marriage
• one or both parties did not recive legal advice when the agreement was made
• there was a failure to provide full disclosure of assets
• the enforcement would cause a significant injustice
• the agreement was made fewer than 21 days before the marriage

Therefore, when drafting your prenup, it is suggested that it covers:

• the family home and how it will be divided, along with other properties and investments
• all money held by both of the parties, this should include any overseas assets and future pension income
• any debts held by wither party (doing this will limit the debt liability of the other party)
• any children from prior marriages and the rights they will hold (if any) to any assets on divorce
• any inheritance or trusts that are received during the marriage
• any business assets held by either party

What have the courts decided previously in relation to prenups and their validity?

As mentioned above, Radmacher v Granatino [2010] was a landmark case in relation to prenups and their enforceability. The Supreme Court (SC) took a positive stance, stating that the prenup between both parties held a decisive weight when discussing the distribution of assets. The SC further held that the courts should give effect to any prenups entered into freely by each party.

It must be remembered that any prenuptial agreement is likely to have limited weight once a child in born into the marriage, this is because the courts will always put the needs of the children first.

In K v K [2003], the prenup was upheld because the parties showed an intention to create a prenup by putting in the time and effort needed, therefore both parties intended for the prenup to be used on divorce.

The courts in Edgar v Edgar [1980] took a positive stance, holding that any formal agreement, properly and fairly arrived at with competent legal advice, should not be displaced unless there are good substantial grounds for concluding that an injustice will be done by holding the parties to the terms of their agreement.

Before the Radmacher case, there was a longstanding view that prenups go against public policy as referenced in Hyman v Hyman [1929] and Macleod v Macleod [2008], with the latter holding that it was not open to them to reverse this rule, and doing so would go against public policy.

Miller v Miller: McFarlane v McFarlane [2006] looked at the true intentions of the parties, with the courts recognising that what seems appropriate at the start of a relationship may seem much less fair when it ends.

Interestingly, a bill submitted by Baroness Deech called the ‘Divorce (Financial Provisions) Bill’ would have given prenups legal standing, but this bill failed to become law.

The stance taken by the SC in Radmacher shows a true shift in the acceptability of prenuptial agreements. This could be due to a shift in public opinions on divorce, with it now becoming more accepted.

Therefore, if your prenup contains the considerations discussed above and is legally sound, it is assumed that if the time comes to use it, it will be upheld.