(also known as pre / post marriage agreements)

We receive many requests in respect of pre- and post-nuptial Agreements from clients who are considering marrying or entering into a civil partnership. We do not provide advice in respect of family law matters. The following information is a general guide only, provided by Daniel Coombes, a partner at Family Law in Partnership (contactable at This e-mail address is being protected from spambots. You need JavaScript enabled to view it ).

The following guide generally refers to the position on divorce. However, the same points apply equally to the dissolution of civil partnerships; it is just the terminology which is slightly different.

To understand the implications and effect of pre- and post-nuptial agreements, one needs to have a brief understanding divorce law in England and Wales.

The basis for Divorce

For a marriage to be dissolved in England and Wales the court must first have jurisdiction to deal with matters (likely if the parties are living here) and the marriage must have existed for at least one year. If a year has not elapsed since the date of marriage, only proceedings for judicial separation can be brought.

Financial claims

On divorce, the court has wide powers to make financial provision for either party and for any children of the family. That provision may include:

• periodical payments (maintenance / alimony);
• payment of lump sum(s);
• adjustment of the ownership of property; and
• sharing any pensions between the parties.

In deciding to what extent to make such provision, the court has a very wide discretion. It has to consider ‘all the circumstances of the case’ and take into account a list of factors set out in Section 25 of the Matrimonial Causes Act 1973. These factors include things like the ages of the parties, their needs, the financial resources available, the length of the marriage, the standard of living enjoyed during the marriage and the contributions made by the parties. There are other factors. These factors are not listed in any order of priority and a judge in any case may attach whatever weight he or she feels appropriate to each of them.

In longer marriages, the financial provision ordered by the court may be significant. England is has become known as one of the most ‘wife’ friendly jurisdictions in the world when it comes to divorce after a long marriage.

The Effect of Pre- and Post-Nuptial Agreements

Litigating financial claims on divorce through the court in England and Wales is not only expensive but pretty unpredictable given the very wide discretion afforded to the judge. Many people want to remove or limit that exposure to risk and try to achieve a better degree of certainty – by entering into a pre- or post- nuptial agreement. As the names suggest, a pre-nuptial agreement is entered into before a marriage. A post-nuptial agreement is entered after the marriage has already taken place – sometimes early on when the marriage is sound, on other occasions when the marriage is in difficulty and the parties anticipate that it may fail.

History

Traditionally, the courts of England and Wales ignored pre-nuptial agreements on the basis that they were said to undermine the institution of marriage - as they contemplated a future separation / divorce. However, over the years there has been a number of important cases which, on the whole, show a trend for the courts to take greater and greater account of pre- and post-nuptial agreements.

The issue has come to public attention again following the 2010 case of Radmacher v Granatino.

Radmacher

In this case, the wife was German and came from a very wealthy family. The husband was French. They entered into a pre-nuptial agreement shortly before they married which essentially prevented either from making claims against the other. They settled in England and had children. During the marriage, the husband gave up a lucrative career as a banker to undertake scientific research with a much more modest salary. When they divorced, the husband made financial claims against the wife.

The first court allowed the husband’s claims. The Judge did not uphold the pre-nuptial agreement but, because of it, she said she was reducing the award that he might otherwise have received from the wife.

The wife appealed to the Court of Appeal. She was successful. In short, the Judges reduced the husband’s award. They provided for him financially in his role as a father, but not as a husband. This meant that when the children reached majority, some of what he received had to go back to the wife.

The husband appealed to the Supreme Court (the highest court in England and Wales). The case was heard by a panel of 9 Lords in March 2010. It took the Lords 7 months to reach a decision, announcing its judgment in October 2010. The husband’s appeal was dismissed (by a majority of 8 to1).

To increase the chances of a pre-nuptial agreement being given as much weight as possible, it is important that the agreement is well drafted and entered into properly. Advice from specialist family solicitors should be sought.

The effect of Radmacher and the current state of the law

Contrary to many of the newspaper headlines at the time, the decision has not changed the fact that pre- or post-nuptial agreements are not binding on the court. The court retains the discretion to order what it considers to be the right outcome. It will not have its powers fettered by an agreement. Only Parliament can change the law to make such agreements binding.

What the decision has done is elevate the status of pre- and post-nuptial agreements so that it is more likely that such agreements will be adhered to.

A summary of the principle arising out of this case could be said to be: the court should give effect to a pre- or post-nuptial agreement that is freely entered into by each party with a full appreciation of its implications, unless in the circumstances prevailing at the time the court is considering the agreement it would not be fair to hold the parties to their agreement.

To give a little more detail, when looking at pre- and post-nuptial agreements the court should consider three heads:

1. Were there circumstances at the time the parties entered into the agreement that detract from the weight that should be given to it?
2. Were there circumstances at the time the parties entered into the agreement that enhance the weight that should be given to it – the ‘foreign element’?
3. Do the circumstances at the time of the court’s order make it fair or just to depart from the agreement?

Taking each in turn, and lifting from the Judgment itself:

1. Were there circumstances at the time the parties entered into the agreement that detract from the weight that should be given to it?
   1. If a pre- or post-nuptial agreement is to carry full weight the parties must enter into it of their own free will, without undue influence or pressure, and informed of its implications.
   2. The safeguards contained in a 1998 consultation document “Supporting Families” are likely to be relevant – these include making sure the parties give disclosure of their financial positions, get separate legal advice and enter into the agreement at least 21 days before the wedding. However, the question is whether there is any material lack of disclosure, information and advice.
   3. Sound legal advice is desirable, because this means a party will understand the implications of the agreement. Full disclosure may be necessary to understand the implications of the agreement, but if it is clear a party is fully aware of the implications and is indifferent to detailed particulars of the other’s assets, there is no need to accord the agreement less weight because they are unaware of those particulars. What is important is that:
      1. Each party had the information material to his / her decision; and
      2. Each party intended the agreement to govern the financial consequences of the marriage breaking down.
   4. It is important that each party intends the agreement to be effective. That cannot be inferred for agreements entered into in England the past – because when entering into the agreement a party may have been advised that such agreements were void under English law. That will no longer be the case – by entering into an agreement now (to which English law is likely to be applied), it is natural to infer that one is intending the agreement to be effective.
   5. Duress, fraud or misrepresentation will negate any effect the agreement might otherwise have. Even unconscionable conduct such as undue pressure (i.e. falling short of ‘duress’) will also likely eliminate the weight to be attached to the agreement. Other unworthy conduct such as exploitation of a dominant position to secure an unfair advantage would reduce or eliminate it.
   6. The court may take into account a party’s emotional state and what pressures s/he was under to enter into the agreement – but this is not considered in isolation from what would have happened had he or she not been under those pressures (i.e. would s/he have signed up anyway?). The circumstances of the parties at the time will be relevant: their ages and maturity, whether either or both had been married or in long-term relationships before. Another important factor may be whether the marriage would have gone ahead regardless without an agreement, or with an agreement containing different terms.
   7. If the terms of the agreement are unfair from the start, this will reduce its weight, although this question will be subsumed in practice in the assessment of whether the agreement is unfair at the time the marriage breaks down / the court is making an order. By way of example, if a party is incapacitated during the marriage so that they cannot earn a living, the interests of fairness might well justify not holding that party to the full terms of the agreement anyway.
2. Were there circumstances at the time the parties entered into the agreement that enhance the weight that should be given to it – the ‘foreign element’?
   1. This relates to whether a foreign element of a case can enhance the weight which should be given to the agreement. For agreements which pre-date the Radmacher judgment, this can have a bearing on the important question of whether the parties intended the agreement to be effective - if the parties are from countries where pre- or post-nuptial agreements are common and binding, the inference is they did intend the agreement to be effective.
      
      This point is unlikely to be relevant in cases where the agreement was entered into recently (given times were already changing) or after this judgment.
3. Do the circumstances prevailing at the time the court is considering matters on divorce (or dissolution in the case of a civil partnership) make it fair or just to depart from the agreement?
   1. The overriding criterion for the court when resolving financial matters on divorce / dissolution is fairness. Case-law tells us that the three main areas the court considers when assessing fairness are needs, compensation and sharing. If the agreement deals with these matters in a way that the court might adopt if there was no agreement, then there is no problem.
   2. The problem arises when the agreement makes provisions which conflict with what the court might otherwise consider to be fair.
   3. However, the fact of the agreement is capable of altering what is fair (so, what might ordinarily be unfair might be fair because of the agreement) – the agreement is an important factor to be weighed in the balance.
   4. Putting it another way, the fact that the agreement provides for something which the court would not normally order does not necessarily mean the agreement should not be upheld.
   5. The court deliberately did not specify the circumstances in which it would be unfair to hold parties to a pre- or post-nuptial agreement. This is because:
      1. That will depend on the facts of each case; and
      2. It would not be desirable to lay down rules which would fetter the flexibility which the court requires to reach a fair result.
   6. However, the court did give some ‘guidance’ on the question of fairness / unfairness:
      1. A pre- or post-nuptial agreement cannot be allowed to prejudice the reasonable requirements of any child of the family;
      2. There should be respect for individual autonomy – it would be paternalistic and patronising to override the parties’ agreement on the basis that ‘the court knows best’.
      3. It is not inherently unfair for the agreement to exclude / govern ‘non matrimonial’ property (property brought in to the marriage by one party, or inherited / gifted to one party)
      4. If a pre-nuptial agreement tries to address contingencies, unknown and often unforeseen, there is more scope for intervening events to make it unfair to hold the parties to their agreement.
      5. The circumstances of the parties often change over time in ways or to an extent which cannot be, or was not, envisaged. The longer the marriage, the more likely it is that this will be the case.
      6. If a young couple enter into a pre-nuptial agreement (or a post-nuptial agreement shortly after their marriage) when they have little, and they amount a fortune over their marriage with each playing an equal role in their different ways, an ‘each keeps their own’ agreement when the fortune is held by one party is unlikely to be fair.
      7. Of the three heads of ‘needs’, ‘compensation’ and ‘sharing’, it is the first two which are most likely to render an agreement unfair:
         1. If one is left in a predicament of real need and the other enjoys sufficiency or more, the agreement is likely to be unfair;
         2. If one looks after the home and children and the other accumulates the wealth, an agreement that entitles the latter to retain all the wealth that he or she has earned is likely to be unfair.
      8. Where the above two examples do not apply and each will have enough to meet their needs, fairness may not require a departure from the terms of the agreement.
      9. It is in connection with the third strand, ‘sharing’, where the court is most likely to uphold an agreement which provides for something which is different to what the court might otherwise have ordered if there had been no agreement. Putting that another way, if an agreement provides that the parties are not sharing equally their wealth, that of itself is unlikely to be unfair.

To increase the chances of a pre-nuptial agreement being given as much weight as possible, it is important that the agreement is well drafted and entered into properly. Advice from specialist family solicitors should be sought.

Dissolution Abroad

The above assumes that any divorce will take place in England and Wales. If in fact the couple intend to live in another jurisdiction (even if only for a fixed period) it is essential to get advice from a specialist lawyer in that jurisdiction to see what weight (if any) a pre- or post-nuptial agreement will have there. Although such agreements may purport to fix jurisdiction in England and Wales or to be governed by English law, those provisions are often unenforceable where the couple are living elsewhere. It is often desirable to enter into ‘mirror’ agreements in the other jurisdiction (reflecting the terms of the English agreement).