Pre-nups are for everyone – not just the rich

A wealthy heiress has just won a legal battle to protect her fortune from her former husband. Sarah Perkins examines how the landmark ruling on pre-nuptial agreements could now have a major impact on less well-off couples – especially those marrying for a second time.

Pre-nuptial agreements are becoming increasingly popular although they only tend to hit the headlines when rich or famous couples divorce.

The latest example involves the wealthy German heiress Katrin Radmacher and her former husband, Nicolas Granatino, who is French. When they married they drew up a pre-nup saying that he would not make a claim on her money if they ended up divorcing.

The pre-nup would have been enforceable in their native Germany and France but they married in England, where historically the legal position has been less certain.

Under English Law pre-nups are taken into account by the Court but they are not legally binding. This has led to some debate as to their value, especially last year after the High Court decided that it would be unfair to hold Mr Granatino to the pre-nup agreement and awarded him £5.8m from Miss Radmacher’s fortune.

However, that ruling has now been overturned by the Court of Appeal which has cut the payment to £1m – a figure Miss Radmacher was happy to accept. In giving his judgment after the hearing, Lord Justice Thorpe said it was becoming “increasingly unrealistic” for the court to disregard pre-nups and that a “carefully fashioned contract” could provide a valuable alternative to the “stress, anxiety and expense” of going to court in divorce proceedings.

The uncertainty about pre-nups will remain until parliament clarifies the law within a new Statute but in the meantime, this ruling by the Court of Appeal means they are far more likely to be followed. The case has major implications, not just for the wealthy but for millions of ordinary couples as well, as Lord Justice Thorpe was keen to point out.

“There are many instances in which mature couples, perhaps each contemplating a second marriage, wish to regulate the future enjoyment of their assets and perhaps to protect the interests of the children of their earlier marriages upon dissolution of a second marriage.”

The Court of Appeal ruling will influence future divorce settlements with the presumption being that pre-nups should be enforced unless there are compelling reasons to doubt their validity. Such doubts might arise if one party signed without getting proper legal advice or if someone failed to disclose all their assets when the contract was being drawn up.

The ruling means that couples can feel more confident that their wishes and intentions will be followed. This is of particular value to those in second or subsequent marriages who may be far from rich but may still have built up considerable assets such as a home or small business which they may want to protect.

Some may regard pre-nups as unromantic but with so many marriages failing these days, many people just don’t want take any risks. In fact, couples who make such arrangements say it strengthens their relationship to know that they have been able to discuss and agree on important issues that could affect their future.

Sarah Perkins is a Solicitor in the Family Department at Andersons Solicitors she can be contacted on 0115 988 6718 or by emailing: sperkins@andersonssolicitors.co.uk