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)

Facts:

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.

Held:

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)

Facts:

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 Court.

Held:

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.