Pre-Nuptial Agreements - Recent Developments

The English Court of Appeal several months ago gave a landmark decision in the case of Radmacher v Granatino. This case is now the leading authority (which can also be argued in the Jersey Courts) where there is a pre-nuptial agreement and the couple subsequently split.

Under English law the courts have never regarded such agreements as binding but have become in recent years increasingly willing to take them into account when dividing assets.

In Radmacher the court identified the following factors: -

• It is increasingly unrealistic to treat a pre-nuptial agreement as void and of no effect;
• The agreement must be taken into account by the court and the court must be ready to give the agreement appropriate weight in reaching its decision.

It is still the case, however, that the court will give the pre-nuptial agreement less weight in the following cases: -

• Where the marriage has been a long one;
• Children have been born to the couple;
• The agreement would cause unfairness and the court is not able to deal with this unless it disregards the agreement;
• There is any suggestion of duress or there has not been full disclosure of assets;
• The couple did not each obtain independent legal advice before entering into the agreement.

The Court of Appeal in England has therefore stopped short of saying that pre-nuptial agreements should be legally binding but there has been a marked shift in the importance that the court will attach to the existence of such an agreement.

It is clearly the case that pre-nuptial agreements are of increasing importance in certain cases. These would include where the couple are marrying for the second time and already have assets that they wish to protect for their existing family and of course where the parties have significant pre-acquired wealth whether this has been earnt or inherited prior to the marriage.

It is highly likely that the Royal Court in Jersey would be bound to follow the Radmacher decision and although this has not been tested in the Royal Court yet I have seen an increase in couples entering into pre-nuptial agreements and this is a trend I believe will continue as couples gain a better understanding of the importance that can now be attached to them if they subsequently divorce.