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Pre-nups – a modern concept?

A prenuptial agreement is an agreement entered into before marriage which are commonly used to set out how the couple’s assets are to be divided should they later divorce.  

With frequent references in the news to high profile divorces involving prenuptial agreements and recent judicial guidance, they may be considered a modern development.   However, as James Morton’s recent article in Law Gazette revealed, pre-nuptial agreements were utilised as early as 1934.  Estella Blitz was an 18-year old marrying an Egyptian railway official ten years her senior.  She signed a document setting out some questionable promises including ‘not to write to any friend of mine in Egypt or anywhere else’ and not to go out anywhere without her husband.  The document concluded with a paragraph stating that she had signed the conditions without any obligation and if she broke them she was aware that a separation would occur, and she would have no financial claim against her husband in any court.

Historically, courts have been reluctant to be bound by the terms of any private agreement and have maintained discretion of how assets may be divided up on divorce.  More recently, the courts have accepted that pre-nuptial agreements may be taken in to consideration in all the circumstances of the case and have set out some guidance on how a prenuptial agreement should be created to ensure that it will be given decisive weight.

In the case of Radmacher V Granatino [2010] UKSC 42, the Supreme Court held that a court should give effect to a nuptial agreement if the agreement is freely entered into, the parties understand the implications of the agreement and it is fair to hold the parties to the agreement.

Further guidance has been issued by the Law Commission, who recommended the introduction of qualifying nuptial agreements.  It should be stressed that prenuptial agreements must be fair, and in order to be fair both parties needs must be met.

For a nuptial agreement to be qualifying, it must:

·       be contractually valid

·       be validly executed as a deed

·       must not have been made within 28 days immediately prior to the wedding or civil partnership

·       both parties must have received disclosure of the other’s finances

·       both parties must have received legal advice at the time they entered into the agreement.

Though the conditions Estelle agreed to in 1934 indicate an oppressive relationship, the concluding paragraph indicates some awareness at least of the unenforceability of an agreement entered into under duress. Fortunately, the law has evolved and an agreement such as the one Estelle entered into is unlikely to be enforceable today, if indeed it ever was.

Prenups are often seen as unromantic, unnecessary and pessimistic but with many marrying later in life after wealth has been accrued, children from previous relationships to consider and business interests to protect, prenuptial agreements are a practical solution. 

If you are considering a prenuptial agreement or would like further information, please contact one of the team.