A recent ruling in the High Court has made progress towards strengthening the power of prenuptial agreements.
The decision comes 13 years after the landmark case of Radmacher v Granatino, in which German heiress Karin Radmacher succeeded in having her pre-nuptial agreement with Nicolas Granatino upheld. The 2010 ruling was significant in assessing the weight of pre-nuptial agreements with respect to financial relief proceedings and is now said to have been bolstered by this recent High Court decision.
The couple in this latest ruling, known as MN and AN, entered into a pre-nuptial agreement requiring that in the instance of a breakdown in their marriage, each would retain their own pre-marital property. The wife would be entitled to receive £500,000 for each complete year of marriage, with a maximum threshold of £12.5million. Further stipulations included that she would receive half of the London property on the earlier date of them having children or completing their eighth anniversary, and maintenance of £60,000 per annum for each child, on top of school fees and medical expenses.
The parties were found to have freely entered into the agreement, intended for it to be legally binding and both received separate, independent legal advice on their position. Although the agreement was made prior to the verdict of Radmacher v Granatino, the judge ruled that it could not be a “vitiating factor”.
Corinne Parke, Director in the Family team at Lawrence Stephens, comments: “there is a clear movement towards individuals wishing to protect their assets, which may have been acquired prior to the relationship, and doing so before a marriage. If undertaken correctly and with sufficient detail, this can substantially reduce the risk of lengthy and costly litigation should the relationship break down at a future point in time. The Courts are moving to support these individuals, but ensuring that a process is followed and both parties rights are suitably protected”.