It’s been ten years since the landmark case of Radmacher v Granatino, which became the main point of reference for pre-nuptial agreements. One thing the last decade has taught us is that prenups are not just for the super-wealthy.
Families today are becoming more blended, with nearly one in every two marriages ending in divorce, second or third marriages are now increasingly more common. As a result, prenups are now a bigger consideration for more couples from a variety of financial backgrounds, particularly where parties wish to provide for children from previous relationships.
Radmacher v Granatino
In the case of Radmacher v Granatino, Katrin Radmacher and Nicholas Granatino entered into a pre-nuptial agreement prior to their marriage in 1998. The prenup was subject to German law and stated that neither party would claim on the property of the other during the marriage in the event of divorce or separation. Ms Radmacher instigated the prenup in order to protect her family’s wealth, and Mr Granatino entered into the agreement but declined to take his own legal advice.
Following the parties’ separation, Ms Radmacher petitioned for divorce in 2007 under English law as the parties were living in London with their two children at the time. The matter went to the High Court who ordered that Mr Granatino be awarded a lump sum of £5.85 million in settlement of the parties’ finances. This was appealed by Ms Radmacher who said the pre-nuptial agreement should be considered by the court.
The case went to the Supreme Court, where the terms of the prenup were examined. It was held that Mr Granatino should be provided for as the children’s father, and was awarded a lesser sum of £2.5 million to enable him to house himself for the benefit of the children. However, in accordance with the terms of the pre-nup, it was also ordered that the sum awarded to Mr Granatino would be returned to Ms Radmacher when their youngest child turned 22.
Mr Granatino tried to appeal the decision, claiming that he should not be bound by the terms of the agreement on the basis that he was not as wealthy as his wife, and he had not sought his own independent legal advice. However, in October 2010 it was held that the terms of the pre-nuptial agreement were valid, and that the court could give effect to the agreement even if the result is different to what would have been ordered by the court had there been no agreement in place.
Does this mean prenups are legally binding?
While pre-nuptial agreements are not binding as a general rule, this case provided clarity on the court’s approach towards them. As long as the agreement is entered into freely by the parties at least one month prior to the wedding, they have both taken legal advice and provided information regarding their finances, and the agreement reflects a fair settlement taking into consideration the needs of any children, then it will be upheld by the court.
What are the benefits of a prenup?
The benefit of a pre-nuptial agreement is that it provides certainty in the event of divorce or separation, as it will set out what each party will be entitled to. This can be useful for protecting valuable assets, such as property, savings, income, and businesses. In addition, the agreement can also set out the position of future debts to prevent one party from becoming responsible for the other’s liabilities.
Pre-nuptial agreements also allow individuals to provide for children from previous relationships, rather than having their spouse benefit from them. This can include various assets as well as other provisions spouses have a right to, such as pensions and life insurance policies. This means that couples can agree for such benefits to be left to their children rather than to their spouse following a marriage breakdown.
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If you require any assistance regarding pre-nuptial agreements or in relation to a relationship breakdown, please feel free contact us today.
