The latest cases in the UK courts in involving prenuptial agreements show how important it is to have a properly draw-up prenuptial agreement in the UK in order to preserve of your assets in the event of any divorce.
The UK courts are giving growing importance to the provisions of prenuptial agreements and show an increasing willingness to adopt and enforce the provisions of such agreements.
The purpose of this site is to provide a useful overview of the issues involved prenuptial agreements and is not intended to give a detailed review of the UK case-law on prenuptial agreements.
However, there have been a couple of
important decisions in the UK courts very recently and
effects of these decision and the implications of the
cases are briefly reviewed below.
MacLeod v McLeod (2010)
The Husband and Wife were married in
Florida in 1994. The Husband was significantly older
than the Wife and had made a substantial fortune before
the marriage. On the day of the wedding they entered
into a pre-nuptial agreement. In 1995 the partied moved
to live in the Isle of Man and had 5 children within
the next 6 years. On 25th July 2002, the parties entered
into a further agreement which was substantially more
generous to the Wife than the previous agreement. There
was financial disclosure and the Manx court were satisfied
that the wife entered into the agreement freely, with
a full understanding and after taking legal advice,
which she chose not to follow. The marriage broke down
just over a year later in August 2003.
The Privy Council ruled in favour of
the Husband and upheld the 2002 post-nuptial agreement.
The decision gave rise to some interesting points including
the comments made that an agreement executed after the
marriage will carry more weight and will be more likely
to be upheld than a pre-nuptial agreement.
Radmacher (formerly Granatino)
v Granatino (2010)
The husband was a French national and
the wife, who was of substantial wealth, was a German
national. Prior to their marriage they signed a pre-nuptial
agreement in Germany (where it was valid). The effect
of the pre- nuptial agreement was that neither party
was to derive any interest in or benefit from the property
of the other during the marriage or on the breakdown
of the marriage. It made no provision for what was to
happen in the event of them having any children.
They were married in London in November
1998. They had two children. In October 2006, after
8 years of marriage, they separated and were later divorced
in July 2007. The parties lived together for the majority
of their marriage in London and had two children of
whom they shared custody.
The husband brought a claim for ancillary
relief, seeking an order against the wife both for periodical
payments and for a lump sum.
In the first instance, the court concluded
that the agreement was unfair and fell short of a number
of safeguards including the fact that the Husband had
not received independent legal advice. The court therefore
gave little weight to the agreement. Nonetheless because
the husband had signed the agreement and understood
the underlying principle that he would not be entitled
to anything if the parties divorced, the court still
awarded the Husband a total of £5.56 million,
on the basis that this would provide him with an annual
income of £100,000 for life and enable him to
buy a home in London, where the two children could visit
him. He was also awarded periodical payments of £35,000
a year for each child until they ceased full time education.
In addition she was ordered to buy a home for him in
Germany (which would remain owned by the wife) where
the two children could stay with him.
The wife appealed successfully to the
Court of Appeal, who held that the pre-nuptial agreement
should have been given decisive weight. The award should
have made provision for the husband’s capacity
only as the father of the two children and not for his
own long term needs. The husband appealed to the Supreme
The Supreme Court found no error
of principle on the part of the Court of Appeal. The
court should give effect to a nuptial agreement that
is freely entered into by each party, without undue
influence or pressure with a full appreciation of its
implications unless it would not be fair to hold the
parties to their agreement in the circumstances. The
husband’s appeal was therefore dismissed.