News
Pre-nuptial Agreements
It has been said that London is the divorce capital of the world. The news has reported on a number of high profile cases in recent years. For example; Heather Mills Macartney £24mil after a 4 year marriage, Mrs Miller £5mil after a 2 year marriage and Mrs McFarlane £250,00 pa for life after a long marriage. All big money cases where the husband’s financial resources have been far greater than the wife’s and there has been ample money to meet the needs of the parties. Nevertheless, cases which reverberate throughout matrimonial proceedings of a lesser value.
Unsurprisingly therefore people entering into marriage are increasingly seeking to preserve the assets which they bring into the relationship. A recent survey by Grant Thornton Accountants reported that 77% of lawyers surveyed reported an increased demand for pre-nuptial agreements. A pre-nuptial agreement is a document entered into by parties to a relationship prior to marriage or civil partnership to deal with the division of assets upon divorce/dissolution. Such agreements need to be entered into on the basis of disclosure of the parties means and independent legal advice. Not an easy matter to address at the start of a marriage, however a lot easier than dealing with matters at the end.
The big problem with pre-nuptial agreements in this country is that they are not binding on the courts. In America or other parts of Europe they are. However, in recent months a number of English cases have begun to cast doubt upon this presumption.
The first of these was the case of Crossley. Mrs Crossley (formerly Sangster) was married to Mr Crossley for 4 years. However, before entering into the marriage they signed a pre-nuptial agreement in which both agreed that in the event that the marriage failed they would not seek to claim the others assets. When the marriage did fail Mrs Crossley contary to the agreement sought to claim from Mr Crossley, despite being worth £18million in her own right!. The court upheld the agreement despite Mrs Crossleys protestations that he had not disclosed off shore accounts.
In the second case of Radmacher v Granatino the pre-nuptial agreement was also upheld, even where the Husband did not receive independent legal advice and the agreement was written in German. Mr Granatino is Italian! The court felt that England should not be out of step with other countries in recognising these agreements and that adults should be capable of making their own bargain. So after an 8 year marriage Mr Grantino was not able to overreach the agreement, something he may have wished to do as his then wife was an heiress to a £100million fortune!
Whilst the case law so far has addressed big money cases it is easy to see how a prenuptial agreements may help in more real world situations. With so many first marriages ending in divorce there is a consequent rise in second marriages. Often people entering into a second marriage will be older and have accumulated assets in their own right. If the law continues to develop as at present it is increasingly likely that pre-nuptial agreements entered into in the proper manner will be binding and therefore represent a very real insurance policy against the worst happening.
As a practising matrimonial lawyer I see the consequences of divorce daily and know that a proper pre-nuptial agreement entered into before the start of the marriage and recognised by the courts could save a lot of heart ache and financial loss at a later date. Whilst such agreements at present cannot produce a guaranteed result it looks as if they will soon. If anything can help mediate the lottery of matrimonial proceedings its worth taking.
Alastair Sinclair
Partner
SMR Solicitors
Please contact Roger Stone at Chichester or Sarah Evans at Selsey for more information.