A prenuptial agreement or prenup is a legal document that sets out how a couple’s assets would be divided split should they split up. They have long been popular in the US, but more and more couples are now entering into prenuptial agreements in the UK even though for many there is still a question as to whether prenups stand up in court.
This is not a new question. However, the recent judgment in MN v AN  EWHC 613 (Fam) has brought the issue into sharper focus.
This case centred around a dispute between a husband (aged 61) and his wife (51) over whether or not the prenuptial agreement they entered into before they married in September 2005 – at which point the husband was worth approximately £32.5m and the wife £62,000 – should be upheld.
Their agreement was drawn up by experienced family lawyers and signed well ahead of their wedding. It confirmed both parties had received separate and independent legal advice and had entered into it freely and accepted the agreement would be legally binding.
The terms stated parties would retain all the assets they accumulated before they met. It also stated the wife would also receive £500,000 for each complete year of marriage up to a maximum of £12.5m and one half of their London property after either their eighth wedding anniversary or the birth of a child depending on which happened first among other provisions.
Their marriage broke down within two years. The wife started legal proceedings on the basis the terms should not be upheld as the provisions were insufficient and she claimed she had been pressured to sign. In response the husband made various offers, one of which would have seen the wife receive £500,000 more than she would have been entitled if the prenup had been adhered to.
The wife did not respond so the husband asked the court to determine whether the terms of the prenup should be observed. The judge was clear. The prenup should be observed, particularly as it made perfectly reasonable provisions for the wife and because both parties had received independent legal advice following a full disclosure of their respective assets.
This decision echoed the core principles from the UK Supreme Court’s decision in Radmacher v Granatino in 2011. In this case the court decided couples should be held to the terms of either pre- or post-nuptial agreements unless it could be shown that:
· The terms were unfair
· Either party hadn’t received independent legal advice
· Either party didn’t fully understand the implications of the agreement,
· A full disclosure of both parties’ financial positions had not been made
· Either party had been placed under duress or undue influence before signing the agreement
Both decisions – and more specifically the reasons behind the decisions – suggest that a prenup will stand up in court as long as these criteria are satisfied.
Can a prenup be contested during a divorce?
Although these examples – and the continued influence of Radmacher v Granatino in particular – does suggest prenups will be observed during divorce proceedings, it is still possible to contest a prenuptial agreement during a divorce. However, legitimate reasons for contesting the agreement will need to be provided. These include:
· The children of the marriage would be treated unfairly
· The agreement was signed when one party was mentally ill
· Either party being placed under coercion or undue influence at the time of signing
· If it can be proven one or both parties didn’t completely understand the terms and/or implications of the agreement
· The agreement was drawn up less than 21 days before the marriage
· Both or either parties had not fully disclosed any assets or debts
· The agreement had been signed with forged signatures
· Changes had been made to the text after the agreement had been signed (although it is possible to legally amend a prenup during the marriage should either party’s financial circumstances change)
Can a prenup be declared invalid by a judge?
There are several reasons why a prenup could be declared invalid even without being challenged. These include (but are not limited to):
· The judge being able to show one party was coerced into signing the agreement or were mentally ill when they did
· The judge being able to show it is evident that either one or both parties didn’t understand what they were signing
· The agreement containing questionable requirements that could be seen as efforts to control or demean either party
· Legal advice hadn’t been sought during the drafting process
· Either or both parties hadn’t fully disclosed their assets and debts
· The paperwork was either poorly drafted or filed improperly
In short, prenups are being viewed in an increasingly positive light in the family courts. This means they are playing their part in protecting finances and family wealth in high net divorces, as long, of course, as the criteria listed above are satisfied.
However, more judges and more courts are recognising and enforcing the terms of prenuptial agreements, there will still be circumstances in which the prenup could be rendered null and void in the eyes of the court. This means it is still essential you seek specialist legal advice from an experienced family law professional if you are considering entering into a prenuptial or post-nuptial agreement.