The Court of Appeal recently overturned a near £6 million divorce settlement to take a pre-nuptial agreement into account, a move that legal experts say gives more weight to these documents.
Pre-nups - which set out how assets should be divided when marriages break down – are not contractually binding. The law states that if both parties cannot come to an agreement, then it is then up to the judge has the final say, and can decide whether to take any pre-nup into account.
Earlier in July, the Court of Appeal ruled that a pre-nup made overseas is valid in Britain, in the case of millionaire Katrin Radmacher and Nicolas Granatino.
The couple took out a pre-nup before they married in 1998, which stipulated that Granatino would be entitled to nothing if the union later broker down.
However, the High Court refused to respect this document during their subsequent divorce because it was concerned about certain aspects of the agreement - namely that Radmacher's French husband-to-be didn’t take any independent advice and the document was written in German.
However, the Court of Appeal decided Granatino knew what he was doing when he entered into the agreement, leading to the loss of his previous £5.9 million divorce settlement.
So what does this mean for couples debating whether to spend £1,000 or more on drawing up a pre-nup?
Technically, the law has not changed. However, the Court of Appeal’s judgment has highlighted the importance of seeking legal advice and getting a pre-nup properly drawn up.
James Freeman, a partner at Speechly Bircham, says: “The court is more likely to respect a pre-nup where it concludes it is fair to both parties.
"Agreements drawn up by lawyers hold more sway because the judge can see there is no imbalance of power, and both parties clearly understood what they were agreeing to.”
There are four important things to remember when drawing up a pre-nup:
* You must ensure that both parties have access to independent legal advice
* Both parties should also be honest about their finances, with full disclosure of all assets
* The judge must be sure that neither party has exercised any influence over the other
* The pre-nup has been witnessed and does not contain any mistakes