In a recent case in the family court, the court decided to ignore a pre-nuptial agreement.  Some people may now be wondering whether their existing pre-nuptial agreement is likely to be upheld or ignored. And what they should be doing to protect their financial position on divorce?

What is a pre-nuptial agreement?

 A pre-nuptial agreement is an Agreement which you and you spouse enter into before the marriage, setting out the division of your assets in the event that you divorce at some time in the future. Of course, you hope that you will never need to rely on this document.  It’s there “just in case”.

If you didn’t make an Agreement before the wedding, you can make one during the marriage.

They are most commonly used where one party has significantly more wealth than the other, particularly when this wealth is family, or inherited wealth.

Will the court uphold the pre-nuptial agreement?

There is no absolute guarantee that your Agreement will be upheld by the court.  Agreements are likely to be upheld if:

• There was no undue pressure on either party to enter into the agreement;
• Both parties knew the financial position of the other;
• Both parties took, or had the opportunity to take, their own independent legal advice; and
• Both parties understand the effect the agreement would have for them.

These are basic requirements.  But they are not the only requirements.

The court will not uphold an agreement if one of the parties will be left destitute as a result.  Whatever else you agree, you must make sure that your Agreement meets the reasonable needs of both the parties.

Why would a court not uphold a pre-nuptial agreement?

Ipekci v McConnell concerned huge family wealth.  The wife was the great-granddaughter of the founder of Avon Products, and was very wealthy.  The husband was working as a concierge in New York when the couple met.

The agreement was signed only 15 days before the marriage.  It is good practice to allow at least three weeks, as a minimum.  There must be no hint of any pressure to sign.

The husband did not fully understand the implications of the agreement.  The Agreement stated that it would be governed by New York law.  Expert evidence before the court was that it did not comply with procedural requirements, and would therefore not be upheld under New York law.

The solicitor who advised the husband had previously acted for the wife.  The court saw a clear situation of apparent bias.

Finally – and for the husband, most importantly – the agreement did not meet any needs of the husband.

For all these reasons, the court did not uphold the terms of the Agreement, and a significant lump sum was awarded to the husband.

This case makes clear the importance of taking independent legal advice at an early stage, if you are considering making a pre-nuptial agreement.  You hope that the Agreement will protect your wealth.  But failure to take legal advice may leave you unprotected.

Just as you may need to revisit the terms of you Will, as your life changes over the years, so you will likely need to reconsider the terms of any nuptial agreement.

If you wish to discuss whether a nuptial agreement is for you, or if you wish to update an existing nuptial agreement, we offer a free no-obligation 30-minute consultation.
Contact us to arrange to speak to one of our experienced family law team.