Prenuptial and Postnuptial Agreements have been in vogue recently given the widespread publicity that has emanated from the case of Radmacher -v- Granatino.
In essence, this case centred around the decision in the Supreme Court to uphold the provisions of a Prenuptial Agreement between the parties, notwithstanding the fact that that agreement was drawn up in Germany, and notwithstanding the power of the court to decide for itself just how much the wife and the husband should have for their respective financial settlements.
In essence, the court upheld the agreement and stated some points of principle along the way which were as follows:-
- Such agreements are not binding but persuasive; indeed, some commentators have suggested that there is now a presumption in favour of the application of the provisions of a Prenuptial Agreement.
- Each party, before signing the agreement, must have been notified and must have been aware of their right to obtain independent legal advice.
- Each party must have provided to the other, an accurate disclosure of their respective financial circumstances with regard to income, assets and pension provision;
- The agreement must be a fair one;
- There is no difference of effects between a Prenuptial Agreement and a Postnuptial Agreement.
- The longer the marriage – the less weight is attached to the provisions of the agreement itself.
The consequences of this decision have been notable but perhaps not as quite widespread as a lot of people thought at the time.
On the one hand, it is advisable in certain circumstances, for the “would be” husband and wife to enter into a Prenuptial Agreement. For example, if the wife has a substantial amount of inherited wealth – she might be concerned about the need to protect that wealth from a claim by the husband in the event that the marriage breaks down within a short period.
On the other hand, the act of entering into a Prenuptial Agreement just a matter of weeks before the marriage itself is not always the most romantic way of dealing with these matters. There is a school of thought that says such agreements are not worth the aggravation given that the court may not necessarily be bound by the contents of the agreement in any event.
Where there is a substantial asset and where there is a very substantial gulf between the wealth of one party and that of the other – the romance of the moment sometimes takes a back seat in favour of a hard-headed pragmatism, especially where the wealthy party’s family are expressing concerns about a dilution of wealth to the other party in the event of divorce.