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Talks Divorce

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QUESTION

My wife and I are getting divorced following the breakdown of our marriage. We were married in 2007. Neither of us have been married before and there are no children. Before we were married I owned my own property and other assets, and I remain on a healthy salary. My wife came to the marriage with no assets and no savings. We agreed before we got married that in the event that things did not work out, neither of us would make any claim against the other for maintenance. I am now concerned that our pre-marriage agreement may not be enough to protect my assets and I believe that my wife will try to make a claim for ancillary relief. Will the agreement protect me?

ANSWER

The agreement you are referring to is what is known as a prenuptial agreement; an agreement that two parties enter into, in anticipation of them getting married, which sets out what will happen if a couple gets divorced or separates. Such agreements seem in principle to be a very good idea for parties where both parties bring significant assets to the relationship, or more likely one party has assets and the other does not.

Prenuptial agreements are binding in many states in America and too in a vast majority of EU
member states.

It has long been the case in the courts in England and Wales as confirmed in cases like F v F (1995) and more recently MacLeod v MacLeod (2008) that prenuptial agreements are not binding upon the court in deciding financial matters between divorcing couples. Therefore they are treated as merely indicative to the court as to the parties’ intentions when they entered the relationship. Instead the court should employ any or all of the factors set down by the Matrimonial Causes Act 1973, of which there are eight including the parties’ financial resources, standard of living during the marriage, the ages of the parties, the duration, the contributions both financial and non financial as well as the conduct of the parties. Using the ‘yardstick of equality’ the court will begin at a presumed point that each party is entitled to fifty percent and depart from that position only insofar as the facts of the instant case warrant such a departure.

Prenuptial agreements will be more persuasive in shorter marriages where it is clear that one party brings great wealth into the relationship.

However, the status quo may be close to change following the recent case of Radmacher v Granatino (2009). Ms Radmacher is a German heiress thought to be worth £100 million. She and Mr Granatino agreed when they wed that in the event of their relationship ending neither of them would make any financial claim against the other. In 2006 the couple separated and soon after they filed for divorce. In 2008, in the High Court, Mr Granatino was awarded £5.85 million. The Judge felt that it was unfair to hold Mr Granatino to the prenuptial agreement given the financial strengths of the parties, and due to doubts over whether Mr Granatino had taken legal advice before agreeing to the prenuptial agreement. The Court of Appeal upheld an appeal by Ms Radmacher and suggested that judges should treat prenuptial agreements as decisive in some ancillary relief proceedings, or furthermore that legislation should be introduced to create a presumption that prenuptial settlements be decisive and that any agreement between the parties should form the basis of any award made by the court. The Court of Appeal reduced Mr Granatino’s award significantly to £1 million plus maintenance payments.

The Court of Appeal decision has been challenged by Mr Granatino and the matter is being heard by the Supreme Court.

It has recently been announced that the Law Commission will be looking into whether it is possible to legislate the circumstances in which the court should uphold a prenuptial agreement.

In summary, your marriage was a relatively short one where it seems that one spouse has, at least in terms of assets, brought a lot more to the marriage. The court’s views on prenuptial agreements and their bearing on ancillary relief matters appears to be changing rapidly, and in my opinion, you would, have quite a robust case to argue following the principles in recent cases and indeed in Radmacher.