Prenuptial Agreements & Second Marriages: Once Bitten, Twice Shy

Prenuptial agreements come into play very strongly on second marriages. And yet, in my experience, too few people embarking on second marriages consider a prenuptial agreement.  Perhaps it is viewed as only for the wealthy or for people with assets abroad (where absent an agreement they would be held to a property sharing regime).  These are all ideal candidates, but prenuptial agreements also have a role for those embarking on second marriages who want to protect their assets in the event of another divorce.

How to increase the weight given to your prenup
Prenuptial agreements are not legally enforceable in English law, yet.  The Law Commission reported on this in 2014 and put forward a proposal to make them legally binding in most circumstances (more of which later) but as we stand, anyone entering into a prenuptial agreement is warned they are not legally binding.  However they are also warned that the courts are likely to give considerable weight to the terms of a prenuptial agreement and the weight given can be increased by following a few important steps.

The seismic change in the law came about in the case of Radmacker (formerly Granatino) v Granatino in 2010.  Here the Supreme Court upheld a prenuptial agreement the terms of which were quite harsh as to the provision to be made for the weaker party financially.  It was thought by some that the fact the losing party was the husband rather than the wife may have influenced the outcome, but the cases that have followed have not taken a sexist line as much as argued for the parties’ right to set their own terms.  To quote Lord Philips in Radmacker:

“the reason why the court should give weight to a nuptial agreement is that there should be respect for individual autonomy … This is particularly true where the parties’ agreement addresses existing circumstances and not merely the contingencies of an uncertain future.”

This, to my mind, lends itself well to the situation of those entering into a second marriage.  They can point to the assets they have brought from their previous marriage; and they can also identify the children (whether minor or adult) they may wish to protect by the agreement.

Can’t oust Court jurisdiction
Entering into a prenuptial agreement is therefore setting out the provision that both parties agree will be the way their assets (current and accumulated during the marriage) should be dealt with on divorce.  This needs to be set against the fact that parties cannot oust the jurisdiction of the court – that is usually taken to mean that you cannot tell a Judge he cannot make the order he thinks is fair, even if you both have agreed something different.  But the Radmacker decision has been a ‘game changer’ in this respect.  To quote another Judge, Charles J in the case of V v V  in 2012:

“The respect to be given to individual autonomy means that the fact of an agreement can alter what is a fair result and so found a different award to the one that would otherwise have been made.”

So, if the courts are to be prepared to let couples take these decisions into their own hands, they expect there to be some safeguards in place to avoid a weaker party being coerced or simply tricked.  The cases have said that each party must enter into the agreement freely and with sufficient advice to enable him or her to appreciate its implications.  Additionally each must intend the agreement to govern the financial consequences of the marriage coming to an end.

There have been qualifications on having sufficient advice to appreciate its implications.  You cannot escape from the terms of an agreement simply by showing some insignificant asset was not disclosed.  The larger the asset base the party was aware of, the less consequential a small non-disclosure will be.  It also seems to be difficult to avoid an agreement on the basis the legal advice was not detailed enough.  It may well be the case that, for those who have already been ‘through the system’ and have had a divorce, there could be an assumption from the judges that they would be more familiar with the rights or claims that they may be limiting or relinquishing.

Recommendations
Going back to the Law Commission report, it sets out in some detail the steps that they recommend would lead to a binding agreement – they call them ‘qualifying nuptial agreements’:

• Should be at least 28 days before the marriage
• Made by way of deed
• Contain signed statements that both understand it will remove the court’s discretion to make financial provision orders (with an exception)
• Both parties should receive disclosure of material information about the other’s financial situation
• Both parties should obtain legal advice as to the terms and effect of the agreement under the law of England and Wales

Prenups can operate as a depressing factor
The exception referred to above is that the court can still impose their own view if the agreement leaves either party without provision for their financial needs.  However, even when the court is persuaded that it is not bound by the agreement because it does not provide for a party’s needs, the agreement can still be relevant as it can operate as a depressing factor – affecting (in other words bringing down) the provision the court makes from what it otherwise would have been.

So, for many cases, but particularly for those going into second marriages, prenuptial agreements can offer considerable protection when drawn up correctly.  However if you find yourself in the situation of marriage break up for the second time and you have not protected your assets in this way, all is not lost.  You may be able to argue there is an unmatched capital contribution from your side; the length of the second marriage will have an impact on how significant this is.

For more information please contact Karen Anker, Family Law & Divorce Solicitor 

Disclaimer: While we do all that is possible in terms of ensuring its accuracy, this blog contains general information only. Nothing in these pages constitutes legal advice. You need to consult a suitably qualified lawyer from the firm on any specific legal problem or matter.