According to recent news report, the former glamour model, Katie Price, has embarked on her fourth marriage to businessman, Lee Andrews. Katie has reportedly commented that, despite her well documented history of financial complications following previous divorces, she trusts her new partner so much, she did not feel it necessary to enter into a prenuptial agreement. Contrary to what readers may think, we at McAlister Family Law love a love story, but what are the potential implications of the ‘it won’t happen to me’ fallacy?
I often explain to my client’s that pre-nuptial agreements are like an insurance policy. We don’t plan on dying, yet to protect our families, we insure our lives in the unfortunate event that we do. We don’t plan on crashing our cars, yet we obtain insurance in the event that we do. A pre-nuptial agreement is exactly that, we don’t plan on separating but, in the event that we do, we require that ‘exit strategy insurance’ to protect ourselves, but also our families and our children.
Katie’s decision to forgo a prenuptial agreement serves as a stark reminder that despite leading case law highlighting the gravitas that prenuptial agreements have, they can still be seen as demonstrating a lack of trust. In the eyes of the law, a prenuptial agreement isn’t about planning for your marriage to fail, it’s about ensuring that your assets are protected for your future, and the future of your children.
In the UK, the courts starting point is often 50/50, commonly referred to as the ‘yardstick of equality’. Without an agreement in place, assets that Katie has built prior to the marriage, prior to even knowing of Lees existence, could easily become ‘matrimonialised’ if they are used to support the family. The most likely example would be Katie’s mansion becoming the family home. A prenuptial agreement can specify the parties’ intentions at the outset and can be used to ring fence ‘separate property’, or assets that the parties unilaterally bring to the marriage, in order to ensure their children’s inheritance is protected. It is rarely a parent’s intention to disinherit their own children; however, in the absence of a prenuptial agreement, this outcome can become a very real possibility.
While prenuptials agreement aren’t automatically binding in the UK, the leading case of Radmacher v Granatino, tells us that so long as certain prerequisites are complied with, “ the court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties their agreement”
The decision of Radmachar has brought the UK much more in line with Europe and America where prenuptial agreements are provided alongside the engagement ring (well perhaps not quite at the same time but they follow shortly after) and have been commonplace for many years.
If you would like to discuss how a prenuptial agreement (‘exit strategy insurance’) could benefit you and your family, contact us [email protected].
