Nuptial agreements can help with the division of assets and income on separation or divorce, and although they have been more commonly been associated with certain jurisdictions like the United States, their popularity is growing globally, including in European countries such as Spain, Italy and Germany.
In an increasingly mobile world, couples are moving between countries and encountering the issues of cross-border family law, with assets in various jurisdictions but also competing matrimonial legal jurisdictions too. Nuptial Agreements can be prepared to provide greater certainty to the couple, but even before Brexit the UK had opted out of a lot of harmonisation in matrimonial law and sometimes these agreements are only skin deep in their worth.
Nuptial Agreements: Do they really help?
These are legal contracts entered into by couples before marriage to regulate various aspects of their relationship, particularly concerning property and financial matters. Prepared by specialist lawyers with knowledge of both English law and the relevant European regulations, they can be used to either complement the election of a matrimonial property regime or stand alone:
In Spain, they are known as “capitulaciones matrimoniales” (regulated under the Spanish Civil Code);
In Italy they are known as "contratto prematrimoniale" or "patti prematrimoniali" (governed by Article 162 bis of the Italian Civil Code); and
In Germany they are known as "Eheverträge" or "Ehevertragsrecht" (governed primarily by the German Civil Code (BGB)).
They are becoming more and more common in European jurisdictions and so it unsurprising they are also on the rise in England as well. However, English law has historically been cautious in recognising prenuptial agreements, as the English legal system traditionally values judicial discretion in matrimonial matters.
English law has a lot to thank European countries for in this sector. For example, the landmark case of Radmacher v. Granatino in 2010, where the UK Supreme Court set out the reliance parties can place on prenuptial agreements, was dealing with a German pre-nuptial agreement. The court was keen to emphasise the importance of respecting parties' autonomy and their agreements. While it will never bind the court, particularly in relation to issues around financial support for any children, the court gives considerable weight to these agreements.
Key Criteria for Enforceability
Any nuptial agreement must have recognition and enforceability in mind when it is prepared, together with a wary eye on the applicable law, noted further below. However, at a basic level in order to be recognised and enforced in English law, a nuptial agreement must meet several key criteria:
Full and Free Consent: Both parties must enter into the agreement voluntarily, without any undue pressure or coercion. They should have a clear understanding of the agreement's implications and freely consent to its terms.
Fairness and Reasonableness: The terms of the prenuptial agreement must be fair and reasonable at the time it was made. English courts are unlikely to enforce agreements that are grossly unfair or heavily biased towards one party.
Transparency and Disclosure: There should be full and honest disclosure of assets, liabilities, and financial circumstances by both parties before entering into the agreement. Failure to provide accurate information could undermine the validity of the prenup.
Legal Formalities: The prenuptial agreement must comply with any legal formalities required by the domestic law, as well as those stipulated by English law for foreign agreements to be recognised. This may include the presence of independent legal advice for both parties.”
Applicable law
The EU has sought to harmonise and encourage greater acceptance of matrimonial matters and the European Regulation 2016/1103 of 24 June 2016 on the law applicable to matrimonial property regimes is one such relevant example and allows the election of applicable law. A Spanish court could therefore apply German law to an issue. The Regulation indicates that "In accordance with Article 81 of the TFEU, this Regulation must be applied in the context of matrimonial property regimes with cross-border implications" and is of great help to lawyers in EU member states in advising clients.
Sadly, the Regulation only provides for “enhanced cooperation” and was solely binding on those states who signed up to it. The UK opted out of it. Therefore, where the English court is seized of a financial separation on divorce, it is entirely governed by the English law (Matrimonial Causes Act 1973), and the Family Court will not, even with an election by the parties, apply a foreign law.
Therefore, if an English court is presented with a nuptial agreement, whether or not it is enforceable, it will ultimately only apply English law to the interpretation, particularly on fairness and reasonableness of that agreement.
Conclusion
Despite the increasing recognition of nuptial agreements in English law, challenges remain when it comes to enforcing foreign agreements. Even in 2010, Lady Hale gave a poignant and erudite dissenting judgment in Radmacher, observing that, “the law of marital agreements is in a mess. It is ripe for systematic review and reform.” Little has changed since then, but language barriers, differences in legal terminology, and varying legal frameworks continue to complicate even simple matters.
The evolving nature of family law in all European countries means that the recognition and enforcement of prenuptial agreements may be subject to change over time. Therefore, individuals contemplating entering into a cross-border prenuptial agreement should seek professional legal guidance to ensure their interests are protected from specialist lawyers in both their origin and destination jurisdictions.
