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LOVE IS IN THE AIR

05 April 2011

As I opened my local newspaper recently and a glossy colour supplement tumbled out advertising all necessary items to make a wedding day that perfect lifetime experience. I also heard that the local radio station is running a competition “Bridal Idol” for couples planning a wedding to win everything necessary to make that day absolutely perfect. Then of course there is the royal wedding. Love certainly seems to be in the air!

As I opened my local newspaper recently and a glossy colour supplement tumbled out advertising all necessary items to make a wedding day that perfect lifetime experience. I also heard that the local radio station is running a competition “Bridal Idol” for couples planning a wedding to win everything necessary to make that day absolutely perfect. Then of course there is the royal wedding. Love certainly seems to be in the air!

No doubt a great deal of time, energy and money will be spent on ensuring that all preparations are meticulously carried out to ensure that the big day runs smoothly and is an unforgettable experience. I do wonder however what thought, if any, will be given by the couples getting married with regard to organising their financial affairs before their marriage and/or considering their future financial positions.

In some countries it is possible to enter into a legally binding contract (known as a Pre-Nuptial Agreement) which is entered into prior to marriage and usually includes provision for the division of property and financial support in the event of divorce or breakdown of the marriage. Other provisions can be included such as arrangements for children.

Pre-nuptial agreements are becoming more popular in the UK particularly where parties have assets acquired before marriage and/or are entering into a second marriage. They are not however legally binding in the UK but are likely to carry more weight following a landmark decision in the Supreme Court in October 2010 in the case of Radmacher v Granatino.

In this case the wife was a German heiress worth an estimated £100 million and the husband a French investment banker. The parties entered into a Pre-Nuptial Agreement which in the event of a breakdown of the marriage made no financial provision for either party. The Supreme Court held that decisive weight should be given to Pre-Nuptial Agreements provided they are freely entered into by each party on the basis that both parties appreciate the implications, unless “in the circumstances prevailing, it would not be fair to hold the parties to their agreement”.

This still does not mean that all Pre-Nuptial Agreements are legally binding in the UK. For reliance to be placed them consideration has to be given to the circumstances leading up to the signing of the Pre-Nuptial Agreement which will include the question as to whether both parties give full disclosure of their financial circumstances and whether either party has exerted any undue pressure on the other. The circumstances of both parties at the time will also have to be taken into account to include their age and maturity and consideration will have to be given as to whether the terms of the agreement are unfair from the start.

Even if Pre-Nuptial Agreements can overcome these hurdles, a Pre-Nuptial Agreement may not be legally binding if for example the reasonable requirements of the children are prejudiced or circumstances have changed to such an extent that could not have been envisaged at the time the agreement was signed.

Notwithstanding these caveats a clear message was given by The Supreme Court that decisive weight is now likely to be attached to Pre-Nuptial Agreements and I do wonder if in the future this will mean that on every wedding preparation “to do” list, along with the dress the rings, the flowers etc will be “the Pre-Nuptial Agreement”. Only time will tell, but those considering tying the knot, particularly those with healthy bank balances or expecting to inherit money in the near future should give this some careful thought.