The last 12 months have proved somewhat eventful in the field of pre-nuptial and postnuptial agreements: the age of the latter has now dawned; and the dawning of the former, which occurred some time ago, has now reached the public consciousness.
For many years matrimonial practitioners have been advising clients that, so far as pre-nuptial agreements are concerned, they are an invaluable tool in the wealth protection armoury. By dint of the discretion reserved to the English divorce courts by statute, they cannot be binding on the parties in this jurisdiction (unlike many others). However, done "properly", they can be highly persuasive on a divorce judge. Thus, in this age of the so-called "50% divorce tax", any couple contemplating marriage or civil partnership where a disparity of wealth already exists or (often by reason of inheritance), is likely to in due course, would be wise at least to spare a moment to consider such an agreement.
The highly publicised case of Radmacher v Granatino has added further succour to the pre-nup cause. Whilst it did not go as far as to say that pre-nups are binding in England, it did show a marked willingness on the part of the judiciary to uphold their terms if at all possible. This was despite the fact that there were considered to be several deficiencies in the document - no financial disclosure, no legal advice for the less wealthy party (the husband), no provision to meet even basic needs and no translation into a language that the husband even understood. The Court of Appeal felt it sufficient that, to their mind, the husband appreciated the extent of the wife's wealth, knew in broad terms what the document was intended to achieve, and had the opportunity to seek a translation or legal advice had he so wished. It would be a brave solicitor in the light of this judgment who would advise their client to sign a pre-nuptial agreement assuming that they would not be bound to it because of some supposed failing in its preparation.
And whilst pre-nups have taken one step closer to being binding upon the parties, without yet reaching that point, post-nups are already there. The Isle of Man case of Macleod v Macleod, decided by the Privy Council in late 2008, determined that postnuptial agreements are a different "animal" to pre-nuptial agreements, being dealt with by different statutory provisions. Consequently, as a form of "maintenance agreement", they can bind the parties, absent insufficient provision for any children and the rather nebulous "change of circumstances".
The belt and braces approach from now on would therefore seem to be to put in place a pre-nuptial agreement prior to the wedding or civil partnership, followed perhaps six to nine months after the nuptials by a postnuptial agreement. Why so soon? Well the financial position is likely to be relatively unchanged, making the disclosure process and thus the completion of the document much quicker. Not only that but, with a prohibition on divorce within the first year of marriage, if negotiations or discussions relating to the post-nup prove unexpectedly sticky, raising a red flag about the future prospects for the relationship, then the "get out" opportunity is not that far into the future!
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
