Newspaper article The Journal (Newcastle, England)

Providing Clarity over Pre-Nups; TERESA DAVIDSON and JONATHAN FLOWER from the Family Law Team at Leading Law Firm Ward Hadaway Look at How a Recent Court Ruling Has Brought Pre-Nuptial Agreements to the Fore

Newspaper article The Journal (Newcastle, England)

Providing Clarity over Pre-Nups; TERESA DAVIDSON and JONATHAN FLOWER from the Family Law Team at Leading Law Firm Ward Hadaway Look at How a Recent Court Ruling Has Brought Pre-Nuptial Agreements to the Fore

Article excerpt

Byline: TERESA DAVIDSON; JONATHAN FLOWER

THE decision of the Supreme Court in the case of Radmacher v Granatino on October 20 has dramatically changed the legal landscape when it comes to pre-nuptial agreements.

While the case itself involved a German heiress (with estimated wealth of some pounds 100m) and her French husband, the judgment has implications for thousands of couples in England and Wales who wish to agree, in advance of marriage, the manner in which financial issues should be resolved upon any later divorce.

Prior to Radmacher, while the courts in England and Wales were more inclined to recognise the existence of such agreements, there was still a significant issue as to their enforceability. Radmacher goes a long way to resolving this.

The Supreme Court have decided in principle that judges, when dealing with financial claims on divorce, should give effect to pre-nuptial agreements. However, this is subject to provision that the agreement must have been freely entered into by the parties with full appreciation of its implications.

The judge must consider whether or not it would be unfair to hold both parties to the agreement.

The decision suggests that in terms of enforceability, there is a strong - but not absolute - presumption that pre-nuptial agreements will be binding on the court.

The Supreme Court themselves have said that those who now enter into pre-nuptial agreements will be considered to have intended their agreement to take effect.

So what are the implications for anyone contemplating marriage? Arguably, those seeking to protect assets and wealth from later divorce can take significant comfort from the judgment to the extent that the courts will now be more likely to uphold pre-marital wealth planning in the form of a pre-nuptial agreement.

This is especially important where one party to the proposed marriage is much wealthier than the other, where someone has inherited assets, in respect of those marrying for a second time or those who expect to inherit during the marriage. However, when entering into a pre-nuptial agreement, certain formalities must still be observed as failure to do may impact on its enforceability. …

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