Founder and managing partner Katie McCann lays out practical advice for HNW clients looking to enter into pre-nuptial agreements in the Legal Diary.
Katie’s article was published in the Legal Diary, 6 June 2022, and can be found here.
Pre nups are rising in popularity these days. My advice to clients is always…if there is any wealth to protect, why wouldn’t you get one?
They are not technically binding, despite calls from the Law Commission for legislative change. However, if they are entered into properly, the current state of the law suggests that the court is likely to ask ”why shouldn’t it be applied” in the event of a divorce?
The leading case is Radmacher (formerly Granatino) v Granatino [2010] UKSC 42 and the practical principles to draw from this are as follows:
- The agreement should be entered into freely and without duress.
It is no good having an agreement where one party is effectively bullied into it. This duress argument also extends to the amount of time in advance of a wedding that the agreement is finalised. Good practice is to have this signed off at least 28 days before the wedding. That means if you are thinking of having one of these agreements you should start seeing lawyers at the very latest two months before the wedding. Even the simplest of agreements can take some time to get on paper, be reviewed, tweaked and finalised.
- There should be parity of advice.
Agreements will always carry more weight if both parties have had adequate legal advice. It is usually good practice that if one party instructs experts in this field, other suitable experts are proposed to the other party and the financially more well off party pays for the advice. An agreement can be made all the easier if another well versed expert is instructed for the other party. It takes the stress out of what can otherwise become quite an adversarial process.
- There should be full and frank disclosure.
It is good practice to provide this with the draft agreement to the other party. This can be by way of list. The other party can reciprocate and if either has any questions or wants to see specific documents/valuations, then that should be made available. Each party should have the relevant information to inform their decision. They need to know what they are effectively signing away their matrimonial rights to!
- The agreement should overall be fair.
This is often the hardest thing to consider. None of us have a crystal ball. However, practically, housing need and income need, bearing in mind the ages of the parties and whether there are any children should be considered. It might be that if you are dealing with a young couple that stages for review are built into the agreement.
