Will The Courts Uphold Our Prenuptial Agreement?
It is not uncommon for high net worth couples who met before they made the ‘big time’ not to have a prenuptial agreement. Famous examples include Bill Gates, who married Melinda Gates in 1994 and Arnold Schwarzenegger, who married Maria Shriver in 1986. In the case of Schwarzenegger and Shriver, their divorce has only just been finalised after a ten-year court battle in the United States. It is believed at the time of the divorce, their net worth was around $400m, which due to the absence of a prenup agreement, is likely to be divided equally between them. As of 2022, the pendulum has very much swung in the other direction, with many couples choosing to protect their wealth with a prenuptial agreement, due in large part to the landmark case of Radmacher v Granatino in 2010. In this article, we will explain whether the courts consider pre-nuptial agreements to be legally enforceable in England and Wales.
What is a nuptial agreement?
A nuptial agreement, whether entered into before marriage (pre-nuptial) or afterwards (post-nuptial), lists which party to a marriage or civil partnership owns or will own individual assets in the event of legal separation. This includes matrimonial assets and jointly owned property acquired during the marriage or civil partnership, and non-matrimonial assets, which may include assets owned prior to the marriage, inherited assets, and any gifts received during the marriage. The aim of a nuptial agreement is to provide clarification, certainty, and protections regarding how parties will conduct their financial affairs after a divorce.
Are prenuptial and postnuptial agreements legally binding?
It may come as a surprise to know that pre and post-nuptial agreements are not legally enforceable in England and Wales. Ultimately, it is for the individual court considering the case to decide on the division of assets based on the information presented, in accordance with section 25 of the Matrimonial Causes Act 1973. This does not mean that they are not taken into account when determining a financial remedy. In the landmark 2010 Supreme Court case of Radmacher v Granatino, it was established that when exercising this discretion, courts should give weight to a nuptial agreement; “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”. As such, a nuptial agreement will typically be given weight by the court if:
- It was entered into freely by both parties (i.e. there was no coercion involved)
- Both parties appreciated the implications of what they signed
- There are no other circumstances that mean it would not be fair to hold the parties to the agreement.
In making this ruling, the Supreme Court made it clear that parties to separation cannot override the discretion of the courts to come to a conclusion on a financial remedy in accordance with section 25 of the Matrimonial Causes Act due to the existence of a nuptial agreement.
Matrimonial Causes Act section 25
Section 25 of the Matrimonial Causes Act 1973 (MCA 1973) states that courts must take into account a range of factors when reaching a decision on the division of matrimonial assets, including:
- the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future
- the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
- the standard of living enjoyed by the family before the breakdown of the marriage;
- the age of each party to the marriage and the duration of the marriage;
- any physical or mental disability of either of the parties to the marriage;
- the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family.
- the conduct of each of the parties.
Is equal weight given to pre and post-nuptial agreements?
In general, there is no difference between how a prenuptial agreement or post-nuptial agreement is taken into account by the courts when deciding on a financial remedy following divorce. This was reinforced in Radmacher v Granatino whereby the Supreme Court disagreed with a distinction made between prenuptial and post-nuptial agreements in the case of MacLeod v MacLeod (2008) by the Privy Council.
While there is no guarantee that their contents will be followed to the letter by a court, the growing popularity of nuptial agreements demonstrates how effective they are in providing robust financial protection in the event of divorce or dissolution. The key is to ensure they are always drawn up in a transparent, open, and fair manner, with both parties fully understanding the implications.
Guillaumes LLP Solicitors is a full-service law firm based in Weybridge, Surrey. We have a highly experienced family law team who can assist you with all matters relating to divorce/dissolution and nuptial agreements. To make an appointment, please call us on 01932 840 111.