Everybody hopes that their marriage will last a lifetime ‘til death do us part’. However, the reality according to The Office for National Statistics is that almost half of marriages presently end in divorce and the figures for second marriages reveal an even bleaker picture. So the recent long awaited case of Radmacher v Granatino has appeared to come as a shot in the arm for those with assets pre-marriage, or those acquired from a first marriage who wish to keep it that way in the event of a subsequent divorce, by signing a prenuptial agreement.
In this case, Miss Radmacher was a wealthy German heiress to a newspaper company and Mr Granatino a wealthy French banker. When they married they entered into a German pre-nuptial agreement providing that in the event of a divorce neither would make any financial claim against the other. Such contracts are binding under French and German law but have only been one of the factors that a court takes into account in England and Wales when deciding a case. The recent decision by the Supreme Court that the pre-nuptial agreement should be upheld has been hailed as ‘groundbreaking’ and a ‘stride towards predictability’ but is it really as cut-and-dried as the popular press would have you believe?
It is correct that this case lends even greater persuasion to the argument that a pre-nuptial agreement should have a significant impact upon a case, but there are no absolutes in dealing with the finances arising out of the breakdown of a marriage. The agreement must, at the end of the day, comply with the overarching principle of fairness and should be entered into freely by each party with a full appreciation of its implications. It also cannot prejudice the reasonable requirements of any children of the family. So what is unfair? This will depend upon the circumstances of the case. What is originally envisaged as fair when the parties married may be inherently unfair at the point of marriage breakdown. There are many unforeseen and unforeseeable events which may make it simply wrong to hold the parties to their agreement and the longer the marriage lasts the more likely that this will be the case.
So what are the implications for ‘us ordinary folk’? In a time when it seems people marry later and second marriages are on the increase where perhaps there will be pre-acquired assets, a pre-nuptial agreement could be the right course of action. The significance, however, lessens the smaller the asset base and the reasonable needs of the parties to satisfy their basic needs will always have to come first. Pre-nuptial agreements will certainly have their place for those who have significant assets to protect, even more so in the wake of this important decision, but in the case where all of the assets are required to meet reasonable needs, today’s prenup could be in tomorrow’s recycling.
Carmelita Ardren is a partner, head of Raworths’ family law unit and a member of the Law Society Family Law Panel. To contact Raworths telephone 01423 566666 or visit our offices at Eton House, 89 Station Parade, Harrogate, HG1 1HF. Alternatively, you can email Carmelita.ardren@raworths.co.uk
