Are pre-nuptial agreements legally binding? A nuptial agreement cannot stop a financial claim being made to the court on marriage breakdown, however, if a claim is made the nuptial agreement will be a relevant circumstance the court must consider.
In Radmacher v Granatino [2010 UKSC 42] the Supreme Court confirmed that ‘the court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement’.
If the three-stage test in Radmacher is complied with parties should expect the court to hold them to the terms of their agreement. This will help in determining if the pre-nuptial agreement is legally binding.
Are pre-nuptial agreements legally binding? The three-stage test
1. The agreement must be freely entered into
Parties must enter into the pre-nuptial agreement without any pressure from each other or anyone else. An agreement is unlikely to be upheld if the court finds evidence of mistake, duress, misrepresentation, exploitation of a dominant position or undue pressure.
In the recent case of Traharne v Limb  EWFC 27 Cohen J held that coercive and controlling behaviour is an example of undue pressure, exploitation of a dominant position or relevant conduct that can vitiate a nuptial agreement.
The terms of the pre-nuptial agreement should be negotiated as far in advance of the wedding date as possible to avoid any last-minute pressure.
The court will consider the parties individual circumstances such as their age and maturity, previous experience of relationships, as well as their emotional state at the time of making the agreement.
In SC v TC  EWFC 67 HHJ Hess disregarded the post-nuptial agreement as the husband was ‘vulnerable’ at the time of signing the agreement.
The court may also consider whether the marriage would have gone ahead in the absence of a pre-nuptial agreement. If a party wouldn’t have gone ahead with the wedding without the agreement that may reinforce its weight.
2. The parties must have a full appreciation of the implications of the agreement
In Radmacher the Supreme Court said that to have a full appreciation of the implications of a nuptial agreement, at the time of signing the agreement, each party should be in possession of all the information material to their decision to sign the agreement. The test is therefore materiality. Each party must have the information they need to make an informed decision on whether to agree the terms of the nuptial agreement.
What is material will differ from case to case. It will depend on how much a couple’s finances are intertwined and how much they know about each other’s financial circumstances. Whilst financial disclosure is not a pre-requisite of Radmacher, parties should each give disclosure of their assets, liabilities, income, trust interests, business assets, pensions and inheritance prospects to enable the other party to assess what future financial claims they may be giving up and to understand how the financial provision in the nuptial agreement will affect the overall division of assets. A summary of the disclosure provided should be set out in a schedule to the agreement.
Both parties should also take independent legal advice so that they understand the implications of the agreement, the advantages and disadvantages of entering into the agreement and an understanding of how the court will deal with financial remedy claims.
3. It must be fair to hold the parties to the agreement in the circumstances prevailing
In Radmacher the Supreme Court provided the following guidance for assessing fairness:
- It is not fair for a pre-nuptial agreement to prejudice the reasonable requirements of any children of the family. Provision should therefore be included for the benefit of any children or a review clause to cater for a change in circumstances following the birth of a child.
- The autonomy of adults should be respected; it is ‘paternalistic’ and ‘patronising’ to override the terms of an agreement on the basis that the court ‘knows best’.
- There is nothing inherently unfair about a pre-nuptial agreement that seeks to ringfence non-matrimonial property. Non-matrimonial property comprises property owned by one party before the marriage, or assets a party receives during the marriage, through lifetime gift or inheritance.
- The longer a marriage lasts following a pre-nuptial agreement being signed, the greater the chance it may not be fair to hold the parties to its terms due to a unforeseen change in circumstance.
- If the pre-nuptial agreement will leave one party in a predicament of need, while the other party is comfortably provided for, this is likely to be unfair.
- If one party has a valid argument for an element of compensation (to recognise the loss of a career following a joint decision to give up work to care for the family) then a pre-nuptial agreement which ignores this compensation is likely to be unfair.
Recent cases law demonstrates that the court will adjust financial provision in a nuptial agreement if it fails to meet need.
In Traharne v Limb  EWFC 27 the court found that a post-nuptial agreement that had been negotiated against the backdrop of a reconciliation had left the pension issues unresolved and did not meet the wife’s need. The outcome of the agreement meant that wife would have an annual rental income of £7,000, private pension income of £6,000 and her state pension of £11,663 which would fall short of her annual income needs of £35,000. To cover the shortfall Cohen J ordered a 12.1% share of husband’s pension, providing wife with an annual income of £6,177 from age 67 and a lump sum of £191,513.
In SC v TC  EWFC 67 HHJ Hess disregarded the post-nuptial agreement as the husband was ‘vulnerable’ at the time of signing and the outcome would leave him in ‘a predicament of real need’. The husband was formally diagnosed with Parkinson’s disease in 2011 and by 2013 the marriage was unhappy and the wife wanted to end it. Husband begged her not to and she agreed provided she had the security of a post-nuptial agreement. The post-nuptial agreement was significantly more advantageous to the wife than the court would have awarded and despite advice from his solicitor that the terms were unfair husband wanted to sign it. In 2020 the marriage broke down and wife contented that the post-nuptial agreement should be upheld whilst husband argued for an equal division of the assets.
HHJ Hess noted that there was financial disclosure, legal advice and both parties were mature and intelligent when signing the agreement. However, the post-nuptial agreement disregarded needs arising from a medical condition, particularly when the condition was known about, and contemporaneous medical evidence suggested husband had some medical issues in 2014 that could have affected his decision making. HHJ disregarded the post-nuptial agreement because husband was a ‘vulnerable person’ when signing it and wife had taken advantage of that vulnerable situation to gain substantial financial advantage, which was unfair.
If the three-stage test in Radmacher is complied with parties should expect the court to hold them to the terms of their agreement. Couples should be cautious about predicting need too far into the future as they may find that they fall foul of the test of fairness. Regularly reviewing a nuptial agreement or including provision within the agreement to provide for needs as they change overtime will help ensure that the court will uphold the agreement. Careful drafting and advice from lawyers with expertise in this area will also ensure your nuptial agreement has the best chance of being upheld.
For more information and legal advice – contact Watson Morris today
Written by Caroline Watson
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