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Are prenuptials worth the paper they are written on?


The short answer is yes. 

Prenuptials must be considered by the court as a factor of the case, in the event that there is a dispute as to how to divide up the assets and income on divorce.

When determining terms of financial settlement on divorce, prenuptial agreements must always be given weight, and often decisive weight as part of the circumstances of the case.   They may affect not only whether to make any award at all, but also the size and the structure of any award.   The following propositions of law are drawn from the leading case of Granatino v Radmacher:

  1. It is the court, and not the parties, that decides the ultimate question of what provision is to be made;
  2. The over-arching criterion remains the search for 'fairness', in accordance with section 25 as explained by the House of Lords in Miller/McFarlane(i.e. needs, sharing and compensation).   But an agreement is capable of altering what is fair, including in relation to 'need';
  3.  An agreement (assuming it is not 'impugned' for procedural unfairness, such as duress) should be given weight in that process, although that weight may be anything from slight to decisive in an appropriate case;
  4. The weight to be given to an agreement may be enhanced or reduced by a variety of factors;
  5. Effect should be given to an agreement that is entered into freely with full appreciation of the implications unless in the circumstances prevailing it would not be fair to hold the parties to that agreement.   i.e. There is at least a burden on the husband to show that the agreement should not prevail;
  6. Whether it will 'not be fair to hold the parties to the agreement' will necessarily depend on the facts, but some guidance can be given:

i) A nuptial agreement cannot be allowed to prejudice the reasonable requirements of any children;

ii) Respect for autonomy, including a decision as to the manner in which their financial affairs should be regulated, may be particularly relevant where the agreement addresses the existing circumstances and not merely the contingencies of an uncertain future;

iii) There is nothing inherently unfair in an agreement making provision dealing with existing non-marital property including anticipated future receipts, and there may be good objective justifications for it, such as obligations towards family members;

iv) The longer the marriage has lasted the more likely it is that events have rendered what might have seemed fair at the time of the making of the agreement unfair now, particularly if the position is not as envisaged;

v) It is unlikely to be fair that one party is left in a predicament of real need while the other has 'a sufficiency or more';

vi) Where each party is able to meet his or her needs, fairness may well not require a departure from the agreement.

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House of Commons Library | Briefing Paper | Pre-nu...

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Sunday, 23 January 2022

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