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Keep it in the Family

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The recent case of Karen Radmacher has been widely reported as the closest case yet to confirm the position of the Court to take full account of a pre nuptial agreement entered into by spouses prior to their marriage.

The case involved considerable family wealth on both sides, a fact that was known by each of them prior to their getting married.  Indeed, one of two main factors that Mrs Radmacher made clear to court as being her reasons for wanting a pre nuptial agreement is that her father had insisted that their family wealth be protected and that he would disinherit her if she got married without an agreement in place.  The other reason was that she wanted to be sure that Mr Granatino was marrying her for love, rather than her money.

I set out below the more specific factors of the case and comment but it is clear that for a family who wish to retain their wealth and protect their family position against any potential claim on the breakdown of  a child's marriage, that a pre nuptial contract is a sensible, cost effective and legally relevant step to be taken.   The Court has made clear that provided the agreement is well drafted and not manifestly unfair on one of the parties, that it will be taken into account and the decisions of the adults involved ought to be respected and upheld.

There were factors in the case that do not appear in every case that we see, particularly the international element.   Mrs Radmacher is German, her husband, Mr Granatino is French.  They were married in London in November 1998, having entered into a pre nuptial agreement in August 1998.

The agreement was drawn up which prevented either party from having any interest in any property brought to the marriage by the other; that any resources accrued by each party would remain theirs; neither would claim against the other on any future divorce or if the other died.

The Judges of the Court of Appeal who ultimately made the decision in the case made the following comments:

Mr Granatino failed in his arguments that the agreement was unfair and it was held that, basically, he knew what he was getting into:

Therefore, for a family who wishes to make their own decisions regarding their future financial arrangements with their offspring, a pre nuptial agreement is increasingly worth the paper it is written on, and significantly more.

Gone seem to be the arguments that a party did not have independent legal advice provided they had chance to do so but did not take it.  Similarly, if the parties were aware of the extent of each others' wealth, the argument that they did not have financial disclosure may also be weak.  If a party is or should be aware of the impact of the agreement and its effects, an argument of ignorance may fall on deaf ears.

The Court will look at the circumstances of each case and will treat adults as such, giving decisions made freely entered into by them due respect and weight, when considering the overriding aim of achieving fairness of outcome.

Mr Granatino is considering a further appeal to the House of Lords and therefore there may be even further clarification by which we as lawyers advising families of wealth can be guided.

If you require any advice at all about preserving your family wealth in advance of a marriage or remarriage or civil partnership please do contact Rachel Spencer Robb, Associate Solicitor in our Family Team.

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