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Archive for November, 2010

Pre-Nuptial Agreements – Now More Likely To Protect the Family Fortune

Radmacher -v- Granatino

Radmacher -v- Granatino

The recent Supreme Court decision in the case of Radmacher -v- Granatino has made a significant change to the way divorce courts will view pre- or post-nuptial agreements. Suzy Hamshaw, a family lawyer at Charles Lucas & Marshall explains the implications of the court’s decision.

It is now much more likely that courts in England and Wales will uphold the terms of a pre-nuptial agreement unless it would be manifestly unfair.  Such agreements are still not legally binding on the divorce court but they will be a much more significant factor that the court will have to take into account.

Miss Radmacher was encouraged by her father to sign a pre-nuptial agreement before she married Mr Granatino. In effect, the agreement stated quite simply that if the couple divorced, neither would make any claim against the other’s assets.

The couple had two children and during the course of the marriage, Mr Granatino decided to give up his career in the City to study for a PhD at Oxford University.  This meant that his income was reduced from over £300,000 a year to some £30,000.  Meanwhile, his wife’s fortune had been increased by the settlement of some £100 million pounds from her family fortune.  No doubt this cushioned somewhat the impact on the family of Mr Granatino’s drop in income.

When they divorced, the first court in London held that the pre-nuptial agreement was not valid for several reasons and ordered, amongst other things, that Miss Radmacher should pay Mr Granatino a lump sum of £5 million. The court said that circumstances had changed since the agreement had been signed and these circumstances were more pertinent to the settlement than the fact that an agreement had been signed.

Miss Radmacher appealed against this judgment and the Court of Appeal reduced the lump sum to £1 million, saying that the terms of the pre-nuptial agreement should stand.  Mr Granatino then appealed to the Supreme Court, which found against him and upheld the payment of the lesser sum.

The impact of this judgment on Family Law is significant. Although the court has not specifically changed the law – that has to be done by Act of Parliament – it has set a precedent that all courts will now follow.  This means that pre-nuptial agreements will be taken into account by a court when couples divorce.  The courts will only change the terms of the agreement if it would be unfair not to do so, taking any changes of circumstances into account.

Interestingly, in this case it is the wife who has the greater fortune to protect and it was the husband who went into the marriage in a weaker financial position.

Among the many articles in the press about this case, I was particularly struck by the comment that an effective pre-nuptial agreement would cost between £5,000 and £7,000 in London.  That may be so for couples having fortunes of £100 million but for the vast majority of people the cost is far less and could be a worthwhile investment.

For further information contact Suzy Hamshaw on 01635 521212 or

Written by Suzy Hamshaw

November 30th, 2010 at 3:34 pm

Posted in News