Pre-nuptial agreements work for business too
08 December 2009
Pre-nuptial agreements work for business too
We have recently seen momentous changes to how courts will approach pre-nuptial agreements with the decision in Radmacher v Granatino [2009].
This case involved a German heiress to a large family fortune who was said to have personal assets of some £52 million, Ms Radmacher. Her husband, Mr Granatino, was a French national and who was studying at Oxford University and was heavily in debt. The couple had signed a pre-nuptial agreement on 1st August 1998 and had married in November 1998.
In this case for the very first time in English law the court decided to give “decisive weight” to an agreement made between the parties before their marriage about how they would separate their assets if the marriage broke down.
Up until that point the courts had been reluctant to enforce pre-nuptial agreements as a matter of public policy- the idea being that it undermined the concept of marriage.
The court has now said that it seems unrealistic not to recognise the rights of adults to enter into an agreement when entering marriage given the prevalence of divorce in society. It also pointed out that England’s policy on pre-nuptial agreements was out of step with the rest of Europe where pre-nuptial agreements are often enforced.
What this means is that it is now more likely than ever that a pre-nuptial agreement would be enforced by the courts. That is not to say it will be decisive. If you are contemplating getting married it could be the best way to protect your assets. If it is a second marriage for you, or if you are bringing greater assets, particularly perhaps a long established business interest, to the marriage than your partner then it is particularly important that you consider this.
Currently in the business arena we are seeing a large increase in the number of business disagreements, and shareholder disputes, and often in these cases the business partners concerned will not have invested in a suitable shareholders’ or partnership agreement before they began. These business “prenups” have always been wise and useful in a corporate world, and now divorce law changes provide greater opportunity for the protection of all assets including business interests when embarking upon marriage.
Family Team
Brachers LLP
www.brachers.co.uk
01622 690691
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