The Value of Pre-Nuptial Agreements

It has been reported that singer and Strictly Come Dancing participant Holly Valance is engaged to be married to her millionaire property tycoon boyfriend Nick Candy.

Mr Candy may be concerned that if he and Miss Valance divorce in the future he may be liable to make a substantial payment to her from the capital he acquired before the marriage. This could perhaps be avoided if the parties enter into a pre-nuptial agreement.

Pre-nuptial agreements are becoming the fashionable precursor to marriage for both celebrities and those people with substantial wealth, in an effort to agree how capital shall be shared upon any future divorce.

In the case of Radmacher -v- Granatino, the Supreme Court upheld the parties’ pre-nuptial agreement, thus reducing Mr Granatino’s settlement from £5m to £1m.

Despite the judgement in the Radmacher case, pre-nuptial agreements are still not legally binding in England and Wales i.e. such agreements cannot oust the jurisdiction of the court. However, following the Supreme Court’s judgement, it is likely that the courts will, in the future, give greater weight to pre-nuptial agreements when deciding financial matters upon divorce.

It will be natural to infer that the parties, who enter into a pre-nuptial agreement prior to their marriage, intend that effect will be given to such an agreement, upon their divorce, and the court therefore should give effect to the agreement pursuant to Section 25 of the Matrimonial Causes Act. The recent case of V –v- V confirmed that following Radmacher due weight should be given to parties’ autonomy and choices. This case also states that pre-nuptial agreements are only one of the factors to be considered and a party may require greater provision than provided for within the pre-nuptial agreement to meet their needs and achieve fairness. It is also important to consider the impact of any children born to the couple as children will be the first consideration of the court.

To be persuasive, a pre-nuptial agreement must be freely entered into by the parties with the full appreciation of its implications, disclosure of assets must be given and both parties should seek independent legal advice.

The other concern of Mr Candy will be what sort of capital award may be made to his wife upon divorce. One of the criteria considered by the courts when dealing with the division of matrimonial assets upon divorce is the duration of the marriage. This means that if it is a short marriage it could be to Mr Candy’s advantage when the court are deciding division of capital assets as clearly his pre-acquired assets may well be excluded (in whole or in part). The outcome would be different if it is a long marriage. 

When dealing with financial matters, the court adhere to the principle of equality and fairness, unless the circumstances are such that it would be unfair to allow equality of division of assets i.e. when seeking to achieve a settlement the court will seek to divide the marital assets between the parties on a fair basis. 

If you are a business owner or have wealth you are seeking to protect and you are contemplating a pre-nuptial agreement or divorce and need guidance, contact a member of our family law department.