Landmark Supreme Court judgement gives weight to pre-nuptial agreements in determining divorce settlement

Many couples are now choosing to marry later and as a result are entering marriage with established businesses, inherited wealth or other assets they may wish to protect in the event of a potential marriage breakdown. Whilst it may be considered unromantic by some, the fact is that approximately 40% of first marriages end in divorce and sadly the figure is even higher for second marriages.

In many countries pre-nuptial agreements are common and legally binding however this is not the case in England and Wales where the existence of such an agreement is just one factor that is taken into account and, until recently, an agreement made little difference to any subsequent divorce settlement. 

However in recent cases courts have shown a willingness to attach far greater significance to a pre-nup’ agreement. In the high profile case of German heiress Katrin Radmacher and her husband Nicolas Granatino the Supreme Court has been prepared to go much further towards an acceptance that the parties should be held to the terms of agreements, as long as both parties fully understood and freely entered into agreement either before or after the marriage.

Whilst a divorce court could conclude that it would not be fair to hold one party to such an agreement, they are now likely to be considered a very important factor. Couples wishing to protect assets or those with controlling interests in businesses, should give very serious consideration to entering into a pre-nuptial agreement.

A pre-nuptial agreement could be highly significant in preventing the potential liquidation or dissolution of the businesses during a divorce, especially where the business represents a major pre-acquired asset or income source to one party of the marriage.

Parents who run a successful family business and intend to pass shares or other family generated wealth to their children in the future, may also wish to ensure as far as possible, that these inherited assets are protected in the event that their children later marry. A pre-nuptial agreement could be an effective way of doing this.

If you wish to find out more about pre-nuptial agreements or to discuss any other issues surrounding the breakdown of a relationship the Family Law Specialists at Davies and Partners Solicitors are currently offering a free initial consultation.

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