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Prenups: Can you change them and do they count?

Jonathan Day from the Stowe Family Law London Victoria office joins us on the blog to discuss prenups: Can you challenge them and do they really count?

When a court grants a decree of divorce, nullity of marriage or judicial separation it has the power to order ancillary relief. Ancillary relief governs the financial arrangements between the husband and wife on the breakdown of their marriage. Sometimes the husband and the wife have already made an agreement governing these matters. The agreement may have been made before the marriage (“an ante-nuptial agreement”) or after the marriage (“a post-nuptial agreement”)” – Lord Phillips, Lord Hope, Lord Rodger, Lord Walker, Lady Hale, Lord Brown, Lord Mance, Lord Collins and Lord Kerr Radmacher v Granatino [2010] UKSC 42

The general perception of nuptial agreements

The leading case on prenuptial agreements is Rachmacher v Granatino [2010] UKSC 42 and I shall refer to the case throughout this article as ‘Radmacher’.

The case was widely reported in the media and I have copied below some of the news headlines:

“Supreme Court rules in favour of prenuptial agreement” BBC 20 October 2010

“pre-nuptial agreements recognised as German heiress wins the fight to keep fortune” The Telegraph 20 October 2010

“Judges back prenups for Britain: Traditional marriage laws are swept aside in landmark decision by Supreme Court” The Daily Mail 21 October 2010

Pre-/post-nuptial agreements are widely known in England and Wales and a quick read of the above headlines or search on the internet may result in a person forming the view that nuptial agreements are enforceable in England and Wales.

Indeed, on 20 November 2017, the Times newspaper reported an increase in prenuptial agreements since the judgment was handed down in Radmacher.

The law surrounding nuptial agreements is, unsurprisingly, not as simple as the above headlines may imply. A person cannot by agreement oust the jurisdiction of the court. The Supreme Court has however stated that the court must give appropriate weight to such an agreement.

Can a party challenge a pre-/post-nuptial agreement?

The simple answer is yes – although your prospects of success will depend on the content of the agreement that you seek to challenge.

Where to start when challenging a pre-/post-nuptial agreement

The general rule is that the court will consider the nuptial agreement in the context of ‘fairness’ when deciding if the agreement is enforceable.

It was stated in Radmacher that:

“The court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to the agreement.”

The court will, therefore, balance the right to autonomy (to self-regulate) against the fairness of the overall agreement.

Is the agreement fair?

When considering if an agreement is fair the court will want to know:

  1. If the agreement was freely entered into by each party;
  2. If each party appreciated the implications of the agreement; and
  3. If the agreement makes sufficient provision for the welfare of any child to the family who is under the age of 18.

Finally, and perhaps most importantly for any person seeking to challenge a nuptial agreement, the court will consider if the agreement is fair taking into account ‘all the circumstances of the case’.

All the circumstances of the case

The circumstances of the parties will often change over time in ways or to an extent which was not envisaged at the time the nuptial agreement was entered into. It was recognised by the court in Radmacher that the longer the marriage has lasted, the more likely it is that this will be the case.

I have copied below an example of a change in circumstances that may render a nuptial agreement to be unfair and therefore unenforceable. This example has been taken from the Court of Appeal judgment in Radmacher and was endorsed by the Supreme Court:

“I have in mind (and in this respect, there is no real difference between an agreement made just before or just after a marriage) that a prenuptial agreement is intended to look forward over the whole period of a marriage to the possibility of its ultimate failure and divorce: and thus, it is potentially a longer lasting agreement than almost any other (apart from a lease, and those are becoming shorter and subject to optional break clauses).

Over the potential many decades of a marriage, it is impossible to cater to the myriad different circumstances which may await its parties. Thorpe LJ has mentioned the very relevant case of the second marriage between mature adults perhaps each with children of their own by their first marriages. However, equally or more typical will be the marriage of young persons, perhaps not yet adults, for whom the future is an entirely open book. If in such a case a prenuptial agreement should provide for no recovery by each spouse from the other in the event of divorce, and the marriage should see the formation of a fortune which each spouse had played an equal role in their different ways in creating, but the fortune was in the hands for the most part of one spouse rather than the other, would it be right to give the same weight to their early agreement as in another perhaps very different example?”

The answer to this question is, in the individual case, likely to be ‘no’.

It is important therefore to note that whilst an agreement may have been fair at the time it was entered into, due to the passing of time or a change in circumstances, it may no longer be considered fair. A change in circumstances may, therefore, render a nuptial agreement unfair and unenforceable.

Whilst the change in your circumstances may not match those quoted above by the Supreme Court, other changes in circumstances may include:

  • A loss of employment
  • A change in your financial circumstances
  • The birth of any children to the family
  • A change to your health
  • Relocation to a foreign jurisdiction
  • Any other change to your needs

Practical Considerations

Review your pre-/post-nuptial agreement

It is my recommendation that you take legal advice on the enforceability of your nuptial agreement before taking any steps to enforce it. You should also take advice on the enforceability of the nuptial agreement immediately if there is any change in your circumstances or needs.

Indeed, even if your circumstances/needs have not changed, due to the fluidity of the law, it is advisable that you take legal advice on the enforceability and/or consequences of the agreement every five years.  This will greatly improve your prospects of the agreement being upheld.

Independent legal advice

Both parties should obtain independent legal advice on the document and the implications of it before signing.

Take advice on the agreement in foreign jurisdictions

If the agreement contains a prorogation clause that confers jurisdiction to a different legal system you should take specialist legal advice in the country that you live in, as well as the country that you wish to nominate to hear your divorce (if different).

If you live in a jurisdiction that is different to where the agreement was drafted, you should take legal advice on the enforceability of the agreement in the country you currently live in and the country where the document was drafted.

Final advice,

Despite the media headlines, there is no guarantee that a nuptial agreement will be enforceable on divorce. To maximise your prospects of the nuptial agreement being enforced on divorce you should:

  1. Instruct specialist family solicitors to draft the agreement
  2. Ensure that both parties are independently advised on the document in advance of it being signed
  3. Arrange for the document to be reviewed regularly and amended where necessary to reflect any changes to your circumstances or needs. A written record should be maintained on each occasion when the document was reviewed to confirm that the parties still wish to be bound by the agreement.

Jonathan specialises in divorce including jurisdiction disputes, financial remedy, non-matrimonial property and inherited wealth, pre/post-nuptial agreements and financial settlements following an overseas divorce amongst others.

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