With the marital celebrations of Prince William and Kate Middleton only a week away, the question flying around some people’s minds is whether Will and Kate have a pre-nuptial agreement (also known in England as a ‘marital property agreement‘) in place.
The use of pre-nuptial agreements has not been widespread in England, due mainly to the fact that up until October 2010 these types of agreements were generally not recognized by the courts. Historically, such agreements were considered to be contrary to social policy and immoral. This was because of the view that spouses had a duty to live with one another and marriages could only be terminated in very limited circumstances. With changes in social norms, these concerns have now, in part, given way to the view that people may not be entering into marriage due to the unenforceability of these agreements.
In divorces where financial assets are an issue, judges have wide powers to provide ‘ancillary relief‘ for either party. The term ‘ancillary relief’ is used because any financial agreement is ancillary – that is, secondary – to the divorce. The ancillary relief can take either the form of a lump sum, payments, or the transfer of property.
The legal landscape relating to pre-nuptial agreements was altered considerably in October 2010 when the Supreme Court of the United Kingdom upheld a pre-nuptial agreement in Radmacher v. Granatino. As a result of this judgment marital property agreements are to be given decisive weight when entered into freely by both parties. Despite this, there are still concerns that these agreements remain generally unenforceable as they do:
not allow a couple to prevent each other from asking the courts to decide how their property should be shared. And it is still down to the courts to decide on a case-by-case basis how much weight to give to any agreement the couple may have made. In many cases this can offer important protection but it can also lead to uncertainty and expensive litigation and there have been calls for statutory reform.
However, whilst the agreement may be unenforceable, it does not render it completely without merit. The courts may take any agreement into account when determining the type of ancillary relief that should be made to either party. In Radmacher v. Granatino, Lord Phillip stated that:
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 to their agreement.
The impact of this judgment is yet to be seen and is being taken into account during the consultation on the current law. The period for submissions ended on April 11, 2011 and a response will be provided within the next few months.
For William and Kate, this means that any agreement entered into prior to the wedding would have ‘compelling weight’ in any divorce proceedings. In the case of any divorce agreement it should also be noted that the majority of William’s wealth was in place prior to the wedding. However, this ‘non-matrimonial wealth’ would not necessarily be excluded from any ancillary relief.