Since 2010 and the case or Radmacher v Granatino the courts have generally accepted that a prenuptial agreement is binding, provided certain conditions are met. These requirements include for example that each party receives independent legal advice and that there is full disclosure by each side of their financial assets.
For individuals wishing to enter a prenup the law therefore has been relatively clear. And for family law solicitors like ourselves at Brookman in London this situation has enabled us to provide practical advice on the issues around prenuptial agreements and to draft bespoke agreements for our clients.
High Court Sets Aside Prenup
A recent decision of the High Court however, where a prenuptial agreement was effectively set aside, has led some family lawyers to question whether these agreements are still as enforceable as they have been since the Radmacher case.
This recent High Court case, Ipekci v McConnell, arose out of the financial remedy claim by a husband after his divorce from his wife. The wife was an American heiress with financial assets, derived mostly from her status as a beneficiary under various trusts, valued at around $65 million. The husband was a hotel concierge with around £50,000 worth of property and £100,000 debt. So there was a huge disparity in their respective net worth.
Before the marriage in 2005 the wife’s lawyer drafted an agreement. The court heard that:
- The husband received advice from another lawyer as required. But one who had previously represented the wife.
- The husband signed the agreement just two week’s before the marriage ceremony.
- The agreement stated that the husband should receive the benefit of ay increase in various properties if there was a divorce. But at the tine of the actual divorce, under the formula contained in the agreement, the husband was entitled to nothing.
- The agreement stated that it was subject to the exclusive jurisdiction of the courts of New York.
A Prenup Without Weight
In his judgment Mr Justice Mostyn was categorical. In the circumstances of the case he could attribute “no weight” to the prenuptial agreement.
He found that it would be unfair to hold the husband to the terms of the agreement and that in the circumstances it did not meet the husband’s needs Applying his wide discretion in deciding on how the husband’s needs should be met the judge awarded him a substantial sum, including an amount to enable him to purchase a home.
A Flawed Agreement
Why was the agreement so flawed?
The case has unusual facts and several clearly distinguishing features. These included:
- The agreement stated that it was subject to New York law. But an expert witness pointed out that under the laws of that state it was in fact defective because it lacked an authentication certificate. If the agreement would have lacked weight in New York it was difficult for the judges in London to enforce it.
- The ‘independent’ advice received by the husband (an essential precursor to prenups in England) was tainted by the fact that relevant lawyer had acted for the wife in her previous divorce.
- The husband’s lawyer had no knowledge of New York law so he received no advice about how New York law functioned and therefore had a limited understanding of the impact the agreement would have on him.
- The agreement was only signed two weeks before the marriage. Usually a prenup should be formalised a couple of months ahead of a wedding to avoid any suggestion of pressure or undue influence on either of the parties.
In light of these facts and contrary to some of the reaction to the case, we don’t believe the Ipekci v McConnell case signals the end of prenuptial agreements as a legally binding way to regulate financial affairs ahead of a marriage. The case does however shine a light on the legal formalities necessary if you want to be able to rely on your prenup. With independent legal advice we see no reason why a properly drafted prenuptial agreement will not continue to be recognised by the courts here.
At Brookman Solicitors in London we draft bespoke prenuptial agreements for clients in collaboration with the solicitors for their partners.
To get in touch with one of our specialist solicitors please call us on 44 (0) 20 7430 8470 or contact us online.