22 November 2016
Prenuptial Agreements: Are They Just For The Rich And Famous?
Billionaire James Packer is reportedly negotiating a multi-million dollar settlement with Mariah Carey following their split.
It is alleged that Mariah Carey would receive a lump sum settlement of $30 million dollars, the use of a private jet and be able to retain her $10 million dollar engagement ring.
But are prenuptial agreements just for the rich and famous?
It is a common perception that prenuptial or postnuptial agreements are drafted only for the celebrities or the very wealthy, but in reality anyone can enter into a nuptial agreement.
Specialist family lawyers are able to draw up prenuptial agreements, to protect the person in the relationship with the greater assets and attempt to predict what their partner will receive.
The principle behind entering into a pre-nuptial agreement might seem alien for the everyday person, but the advantages are it allows each spouse to know in the event of a divorce what they each will receive.
The law on nuptial agreements in the UK differs to that in America. For an English court to give considerable weight to a prenuptial agreement, certain safeguards must have been put in place. The leading case of Radmacher v Granatino 2010 sets out the following principles:
- The agreement reached must be fair in law. Courts must assess the ‘fairness’ and the ‘needs’ of both spouses by examining all the circumstances of the case. There is a checklist of all the factors which should be examined within The Matrimonial Causes Act.
- Both people should provide each other with full and frank financial disclosure.
- Prenuptial agreements should be signed at least 28 days prior to marriage. This is essentially a ‘cooling off’ period.
- Each person must have had independent legal advice.
- The agreement should contain a review clause, typically after the birth of a child, redundancy, in the event of a serious illness or after five years has passed. This will ensure that the agreement is always fair to both people.
The court should give effect to an agreement that was freely entered into by both parties. If the steps above are taken it is likely that the agreement will be upheld in court. A prenuptial agreement can protect someone trying to ring fence assets and attempt to predict the outcome for the spouse with less pre-marital assets.
Although perceived to be unromantic, it is better for an agreement to be entered into prior to the marriage, to save from having a complex divorce post marriage.
Roz Lidder advises on all issues relating to family law, in particular breakdown of marriage, often dealing with disputes which have complex financial aspects. She works as a family law solicitor at Slater and Gordon in London.
Slater and Gordon have the largest team of family lawyers in England and Wales. You can call us for an initial consultation on freephone 0800 916 9055 or contact us online and we will call you.
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