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Prenuptial Agreements and Wills

A recent Court of Appeal decision h as again reaffirmed the move towards pre n u p t i a l a g r e e m e n t s being more persuasive in the divorce courts. The current position in this country is that pre-nuptial agreements are not enforceable as they are seen to be against public policy. The Law Commission are reviewing this position at the moment and results are expected to be published in 2012. This could result in changes to legislation and cases like this seem to indicate a change in attitude towards these agreements. This case involved a German heiress worth between £55 and £100 million and her French husband who had entered into a pre-nuptial agreement in Germany. This was produced in accordance with German law four months before they got married and Ms Radmacher assumed that the English divorce courts would uphold the contract during their divorce in 2006. The contract they had entered into stated that, other than financial provision for their children, neither party would make a claim against the other. The contract was ignored and the court awarded her former husband £5.6 million as part of his divorce settlement. On appeal this was reduced to a one off lump sum of £1 million plus a loan to buy a property which had to be sold when the youngest son reaches 22. So what can be learnt from this case? The case involved a European couple and their agreement would have been upheld to the letter in either France or Germany which shows the different legal approach to pre-nups across Europe. The English judicial system, based very much on discretion, stands alone in comparison to the strict regimes in member states. It does seem that, as agreements between couples become more commonplace across Europe, they will carry considerable weight when presented to an English Court giving a sense of increased effectiveness and strength. The final decision to change the statutory rules is long awaited within the legal profession and leaders in the industry have claimed the lack of legislation is due to it not being seen as a ‘vote winner’.  Although this case involves figures much higher than the majority of some clients will be concerned about there could still be reasons for an agreement. If a couple has strong views on the agreement and their reasons for wanting one they can use an agreement to limit any claims later. Couples who are entering into a second marriage may wish to protect their wealth for children from their previous relationship and this should be considered alongside their Will. A well-drafted pre-nup can provide crucial information in an influential context for a judge who may have to consider the document years later. You could see a pre-nup as an insurance policy. It is something everyone should have in place and hope they never have to use it. But if you do, you will be glad they planned in advance. If you are interested in pre-nup please contact us on 0845 600 3527

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