Published: Places and Faces

Date: April 2011

Author: Stephen Williams

Following the high profile Case of Radmacher, Prenuptial Agreements have become a more reliable means by which individuals may try to regulate their financial relationship after marriage. Radmacher did not say by any means that Prenuptial Agreements are always going to be enforceable. It did however suggest that Agreements fairly entered into with full recognition of the consequences of that Agreement and with the intention to be bound by that Agreement after a process of full disclosure are now more likely than ever to be upheld by the Court.

Therefore in what circumstances might you consider having a Prenuptial Agreement. Several circumstances spring immediately to mind:-

(a) Where there is money in the family, perhaps disproportionately so, and that money requires a degree of protection.

(b) There might be children from a previous relationship and an individual might wish to protect those children financially.

(c) Those who have history of serial relationships.

(d) Those whose religious beliefs might require them to get a religious Divorce.

(e) Where there is an international element and there is potential for divorce forum shopping.

This is not an exhaustive list but there are many situations that I come across where Prenuptial Agreements should have been considered by the parties in advance of any marriage but were not. What then are the golden rules for drafting a Prenuptial Agreement. It seems to me that they fall into a number of categories:-

1. Purpose and intent. It is very important that any Prenuptial Agreement is very clear about the purpose of the Agreement and the intention of the parties in entering into that Agreement.

2. Candour. It is unlikely that any Prenuptial Agreement will be upheld if there has been a lack of material disclosure by the parties to each other of their financial circumstances at the time that the Prenuptial Agreement is being considered, negotiated and entered into.

3. It is essential for the parties to provide the fullest and frankest disclosure that they can and as evidence of that disclosure to attach a document detailing that disclosure as a schedule to the Prenuptial Agreement. If the parties need guidance as to what to
include in their Schedule of Disclosure I always point people to the Form E document that is used by the Divorce Courts to set out what the parties financial circumstances are at the time of a divorce.

4. Legal Advice. It is very important that both parties entering into a Prenuptial Agreement which seeks to determine what is going to happen to financial resources in the event that the relationship fails, take the opportunity of careful and comprehensive
legal advice prior to entering into the Prenuptial Agreement.

5. Ideally the negotiation and discussion regarding the Prenuptial Agreement should take place sometimes before the actual date of marriage. Indeed guidelines issued under the ‘Supporting Families’ HMSO document suggested that the Prenuptial Agreement
ought to be entered into more than 21 days before the date of the marriage anything less may be considered unfair.

6. Precision. The Prenuptial Agreement must be precisely stated given that this is a document that will be carefully scrutinised should the relationship fail. It is absolutely important that this document is clear and concise.

7. Children. Whilst the parties may not have any children prior to the signing of the Prenuptial Agreement if what is to occur in the event of children being born is to comprise part of the Prenuptial Agreement it is very important that the Agreement is drafted in such a way that it does not appear to attempt to in any way oust the jurisdiction of the Court in dealing with children’s matters.

8. Review. It is important that the parties have the opportunity of reviewing the contents of the Prenuptial Agreement at regular periods this will allow the parties to adjust the terms of the Agreement in the light of changes that may have occurred within their family and marriage. If however a review period is stated it is important that the parties remember to undertake that review.

No doubt in due course further Case Law will add to our knowledge of how the issue of Prenuptial Agreements should be addressed but the above guidance should assist individuals contemplating embarking on Prenuptial Agreements to achieve an outcome which is more likely to be enforced than not. Ultimately that is why people on the road to marriage embark on Prenuptial Agreements because they want certainty in their financial affairs thereafter.

For further information contact Stephen Williams