Updated October 2019
In short, the answer is yes, just as you should seek the help of an experienced solicitor before you make any legal decisions. However, when it comes prenups, failing to get the necessary advice and guidance increases the chance that the prenuptial agreement will not be valid.
In this post, we’ll take a closer took at prenuptial agreements, including information about their legality and advice based on recent cases.
Is a Prenuptial Agreement Legally Binding?
In the UK, prenuptial agreements are not yet legally binding or completely enforceable. However, since 2010 (following the widely reported case of Radmacher v Granatino, where the prenuptial agreement was upheld), the family courts have attributed more significance to the existence of a prenup — especially when considering how to divide the assets of divorcing parties. Deciding how much weight a prenuptial agreement is given, if any, is determined by the court, taking its existence into account as one relevant aspect of the case.
Over the last decade, people have become more commercially ambitious, and there has been a noticeable focus on wealth management. Therefore, more couples seek to protect their assets with the help of a prenup. The Law Commission recognised these changes and issued the following helpful guidance on how to give prenups the best chance of being upheld during a divorce:
- The agreement must be entered into by both parties freely and of their own will (and not under duress or any misrepresentation)
- Both parties must have received full disclosure about the other party’s financial situation before signing the document.
- The agreement must be a formal deed and must contain a Statement of Truth, signed by both parties to recognise that the agreement is a qualifying nuptial agreement and stating that the disclosure given is honest and in full.
- The agreement must be entered into more than 28 days before the date of the wedding or civil partnership.
- Both parties must have received legal advice or been given the opportunity to have received legal advice on the consequences and terms of the agreement.
- The agreement cannot attempt to provide an unfair or unreasonable outcome that doesn’t meet the basic needs of the spouse or any children of the marriage.
If the guidance above is followed, your prenuptial agreement will likely be valid (known as a Qualifying Nuptial Agreement — or QNA), and it will be for the family courts to decide how much of the agreement should be implemented upon divorce. The most crucial objective in upholding a prenuptial agreement is to ensure that the parties’ “needs” are adequately met and that the outcome is not an unfair or unreasonable one.
The Recent Case of Versteegh v Versteegh
The issue of prenuptial agreements was thrown up in a recent case concerning Gerard Versteegh (a Swedish property tycoon) and his wife Camilla (a homemaker), who married in 1993. They had three children and lived in a £60 million property in Kensington, West London.
The day before the wedding, on 27th August 1993, Gerard asked Camilla to sign a prenuptial agreement curtailing her rights to his wealth. Camilla signed the document without any legal advice or without having the opportunity to seek legal advice, should she have wished to do so.
Twenty-five years later, the parties filed for divorce, and the prevailing question was whether the prenuptial agreement was valid. Mr Versteegh said that Mrs Versteegh knew what she was signing, while Mrs Versteegh argued that she did not understand the full implications of the agreement and thought that the agreement protected only her husband’s inherited wealth (rather than any assets they built up together during the marriage).
The Judge, Sir Peter Singer, awarded the wife £90 million in cash and assets (representing just 38% of the family’s assets), with the terms of the prenup in mind. At the time, the husband was worth £237 million. The Judge was open in saying that he would have awarded Mrs Versteegh far more than £90 million but for the prenuptial agreement (together with the effect of “Brexit uncertainties” on the husband’s property empire).
This is a compelling case, as you can view it from two diverging perspectives:
- On the one hand, the Judge upheld the prenuptial agreement even though the Law Commission’s guidance had not been adhered to in full and the wife did not receive independent legal advice.
- On the other hand, assuming she knew what she was signing, the award of £90 million still met the wife’s needs for the rest of her life. Therefore, it was not an unfair outcome, even though she didn’t get legal advice. (The same could not be said if the award was for, say, £90,000).
We will wait to see how much weight will be given to the Law Commission’s guidance above in the more “regular” case where the value of the assets doesn’t fall in the high-net-worth divorce bracket.
Making Your Prenuptial Agreement More Secure
This case throws up the following interesting questions:
- How strictly do the family courts apply the Law Commission’s guidance when considering prenuptial agreements?
- Is Mrs Versteegh trying to backtrack on the terms of the prenup, given the success of the family, or did she not understand what she was signing?
- If she didn’t understand the document, is her award fair?
- Was the agreement valid in the first place?
- If Mrs Versteegh had been given an opportunity to take legal advice but had chosen not to, would the agreement still have been upheld, notwithstanding that the outcome may have been the same?
Mrs Versteegh, represented by Mr Tim Bishop QC, is now asking the Court of Appeal to grant her a further £25 million, which means that the parties will be engaged in costly and lengthy proceedings regarding the wife’s understanding of the document.
To give your prenuptial agreement the best chance of being deemed valid, the Law Commission’s guidance is to ensure both parties receive the certainty they strived for by agreeing to enter into a prenup in the first place. By seeking legal advice, you’ll benefit from the crucial knowledge and experience of a divorce solicitor who is experienced in navigating prenuptial agreement disputes.
Are you in need of legal advice regarding a prenuptial agreement? At KMJ Solicitors, we specialise in all areas of family law and are at hand to provide high-quality legal representation. Get in touch today to schedule a FREE no-obligation consultation.