FAQ on The Current Effectiveness of Pre-Nuptial Agreements
FAQ - The Current effectiveness of Pre-nuptial agreements
How are Prenuptial agreements perceived by the courts?
Historically in England and Wales, Prenuptial agreements have been claimed ‘to be not worth the paper they’re written on’. They have remained as an anomaly between the UK and the USA’s perception on matrimonial law. Whilst they are recognised in the USA, and indeed are constantly the highlight of infamous celebrity break ups, they are not perceived with the same enamour in England and Wales. However, the stance of the courts is slowly beginning to align with that of their American counterparts. In recent case law, prenuptial agreements have been recognised, and given substantial weight in determining the outcome of ancillary relief. Although still not considered to be binding, the presence of one is regarded a significant factor under Section 25 of the Matrimonial Causes Act 1973. With the added fact that prenuptial agreements are binding in many of our EU neighbouring states, and that more people from the EU are seeking permanent residence in the UK, it seems logical that to give uniformity to the laws of Europe and legally acknowledge the prenuptial.
If a prenuptial agreement is not binding, what’s the point in having one?
The significance of a prenuptial agreement has been made none so more apparent than in the recent decisions of Crossley v Crossley [2007] EWCA Civ 1491 and Radmacher, formerly Granatino v Granatino Sub nom NGv KR (prenuptial contract) [2009] EWCA Civ 649.
In the former case of Crossley, the terms of the prenuptial agreement were fully complied with in ancillary relief proceedings, and it was one of the first instances in the England and Wales jurisdiction that the courts fully recognised the importance of the agreement. However, as prevalent of this case was in promoting the status of the prenuptial agreement from influential to binding, the courts were able to hide behind the excuse, the even without the agreement, a similar result would have been achieved. Mr and Mrs Crossley had been married a little over a year, both bringing substantial wealth into the marriage, although Mr Crossley had significantly more. They had both entered into a prenuptial agreement which stated that both parties would leave the marriage with whatever assets they brought with them into it. In their relationship, they bore no children, and on the irretrievable breakdown of their marriage, Mrs Crossley sought to have the terms of the prenuptial set aside. The courts identified that this ploy was simply such that Mrs Crossley could exploit the state of English law to obtain a portion of Mr Crossley’s wealth. Also, given the fact that there were no dependants of the marriage, and it had been for such a short amount of time, it made logical sense to uphold the terms of the prenuptial.
However, more recently, the prenuptial agreement has been given a recognition that it has never before received in the history of Matrimonial law in the English jurisdiction. In the case of Grantino v Grantino also known as NG v KR (prenuptial contract) a Husband from France had entered into a prenuptial agreement with his Wife from Germany. Both countries jurisdictions give legal status to the prenuptial agreement, but the marriage itself took place in the jurisdiction of England and Wales. The parties entered into a prenuptial agreement which specified similar terms to that of the one in Crossley v Crossley (above) with the exception that the contract specifically provided that any assets or income accrued by either throughout the course of the marriage, would remain owned by that party. The husband was shown a draft of the agreement a week prior to the wedding, and did not seek legal advice and there was no disclosure of any of the Wife’s assets.
After their marriage in November 2008, the couple went on to have two children and the husband subsequently left his lucrative job in the financial sector, and began to study in the field of biotechnology, with the intent to return to the financial sector at a later date. He claimed that he would continue contributing to the household expenses, but by March 2005, his savings were completely depleted, and he requested that his wife solely provide for the household expenses until he finished his studies. Eventually, in August 2005 the couple separated and in July 2007 the decree absolute was pronounced. The Husband sought to ignore the terms of the prenuptial agreement, and sought to claim from his Wife’s assets. However, it was argued by the wife that to do this would contravene her rights under Article 1 of the European Convention of Human Rights, and that beyond maintenance, the Husband should not be entitled to any further sum of money and that removal of any of her property in the form of a lump sum or otherwise would constitute improper interference with he property rights, as protected under the article. This was held by the courts, and her property was protected from any further claims against it. However, this did not mean that the Wife was free from providing any ancillary relief, and an order was made for her to provide £5.56M in total maintenance to her Husband and to accommodate his proprietary needs in both the UK and Germany, when caring for the Children of the relationship. On top of this, the Wife was ordered to pay a further £70, 000 a year to meet the needs and costs of their children. However, this order was determinable on her children reaching majority and completing their full time education.
But in the Gratino case, the spouse still had to pay maintenance- why was that?
It is true that the spouse still had to pay maintenance, but a prenuptial agreement can not restrict or prevent maintenance orders. They are there to protect a persons assets that they possessed or acquired before or during the marriage. The most intriguing thing about this case, is that the Wife’s assets remained hers, and the Husband was not entitled to any of her estate, as agreed in the prenuptial agreement. The fact that the European Convention of Human Rights was highlighted also shows the significance of the UK being part of the EU. Although the English and Wales jurisdiction does not recognise prenuptial agreements as a legal document, to set it aside without consideration would be a breach of EU law, and in particular, a breach of Article 1 of the first protocol of the convention.
So prenuptial agreements are they still not legally binding?
They are not binding, but they are persuasive and must be taken into account when looking at the overall picture of the parties finances under s25 Matrimonial Causes Act
How are Prenuptial agreements perceived by the courts?
Historically in England and Wales, Prenuptial agreements have been claimed ‘to be not worth the paper they’re written on’. They have remained as an anomaly between the UK and the USA’s perception on matrimonial law. Whilst they are recognised in the USA, and indeed are constantly the highlight of infamous celebrity break ups, they are not perceived with the same enamour in England and Wales. However, the stance of the courts is slowly beginning to align with that of their American counterparts. In recent case law, prenuptial agreements have been recognised, and given substantial weight in determining the outcome of ancillary relief. Although still not considered to be binding, the presence of one is regarded a significant factor under Section 25 of the Matrimonial Causes Act 1973. With the added fact that prenuptial agreements are binding in many of our EU neighbouring states, and that more people from the EU are seeking permanent residence in the UK, it seems logical that to give uniformity to the laws of Europe and legally acknowledge the prenuptial.
If a prenuptial agreement is not binding, what’s the point in having one?
The significance of a prenuptial agreement has been made none so more apparent than in the recent decisions of Crossley v Crossley [2007] EWCA Civ 1491 and Radmacher, formerly Granatino v Granatino Sub nom NGv KR (prenuptial contract) [2009] EWCA Civ 649.
In the former case of Crossley, the terms of the prenuptial agreement were fully complied with in ancillary relief proceedings, and it was one of the first instances in the England and Wales jurisdiction that the courts fully recognised the importance of the agreement. However, as prevalent of this case was in promoting the status of the prenuptial agreement from influential to binding, the courts were able to hide behind the excuse, the even without the agreement, a similar result would have been achieved. Mr and Mrs Crossley had been married a little over a year, both bringing substantial wealth into the marriage, although Mr Crossley had significantly more. They had both entered into a prenuptial agreement which stated that both parties would leave the marriage with whatever assets they brought with them into it. In their relationship, they bore no children, and on the irretrievable breakdown of their marriage, Mrs Crossley sought to have the terms of the prenuptial set aside. The courts identified that this ploy was simply such that Mrs Crossley could exploit the state of English law to obtain a portion of Mr Crossley’s wealth. Also, given the fact that there were no dependants of the marriage, and it had been for such a short amount of time, it made logical sense to uphold the terms of the prenuptial.
However, more recently, the prenuptial agreement has been given a recognition that it has never before received in the history of Matrimonial law in the English jurisdiction. In the case of Grantino v Grantino also known as NG v KR (prenuptial contract) a Husband from France had entered into a prenuptial agreement with his Wife from Germany. Both countries jurisdictions give legal status to the prenuptial agreement, but the marriage itself took place in the jurisdiction of England and Wales. The parties entered into a prenuptial agreement which specified similar terms to that of the one in Crossley v Crossley (above) with the exception that the contract specifically provided that any assets or income accrued by either throughout the course of the marriage, would remain owned by that party. The husband was shown a draft of the agreement a week prior to the wedding, and did not seek legal advice and there was no disclosure of any of the Wife’s assets.
After their marriage in November 2008, the couple went on to have two children and the husband subsequently left his lucrative job in the financial sector, and began to study in the field of biotechnology, with the intent to return to the financial sector at a later date. He claimed that he would continue contributing to the household expenses, but by March 2005, his savings were completely depleted, and he requested that his wife solely provide for the household expenses until he finished his studies. Eventually, in August 2005 the couple separated and in July 2007 the decree absolute was pronounced. The Husband sought to ignore the terms of the prenuptial agreement, and sought to claim from his Wife’s assets. However, it was argued by the wife that to do this would contravene her rights under Article 1 of the European Convention of Human Rights, and that beyond maintenance, the Husband should not be entitled to any further sum of money and that removal of any of her property in the form of a lump sum or otherwise would constitute improper interference with he property rights, as protected under the article. This was held by the courts, and her property was protected from any further claims against it. However, this did not mean that the Wife was free from providing any ancillary relief, and an order was made for her to provide £5.56M in total maintenance to her Husband and to accommodate his proprietary needs in both the UK and Germany, when caring for the Children of the relationship. On top of this, the Wife was ordered to pay a further £70, 000 a year to meet the needs and costs of their children. However, this order was determinable on her children reaching majority and completing their full time education.
But in the Gratino case, the spouse still had to pay maintenance- why was that?
It is true that the spouse still had to pay maintenance, but a prenuptial agreement can not restrict or prevent maintenance orders. They are there to protect a persons assets that they possessed or acquired before or during the marriage. The most intriguing thing about this case, is that the Wife’s assets remained hers, and the Husband was not entitled to any of her estate, as agreed in the prenuptial agreement. The fact that the European Convention of Human Rights was highlighted also shows the significance of the UK being part of the EU. Although the English and Wales jurisdiction does not recognise prenuptial agreements as a legal document, to set it aside without consideration would be a breach of EU law, and in particular, a breach of Article 1 of the first protocol of the convention.
So prenuptial agreements are they still not legally binding?
They are not binding, but they are persuasive and must be taken into account when looking at the overall picture of the parties finances under s25 Matrimonial Causes Act
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