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Less than a year after the Privy Council commented that Parliament would have to provide the authority for pre-nuptial agreements to have legal effect in the UK, a Court of Appeal decision has seemingly turned the law on its head.

The Court ruled that the French husband of a German heiress should receive only about £1 million from her estimated £100 million fortune after their divorce, because he had signed a 'pre-nup' to waive any rights to her wealth should they divorce. He will also have approximately £700,000 in debts paid off and will have a house provided until the couple's daughter reaches 22.

The lower court had awarded him £5.6 million. The case was brought in the UK, which has traditionally regarded pre-nuptial agreements as unenforceable. However, they are enforceable in both France and Germany. The couple married in 1998 and the marriage broke down when the husband left his job as an investment banker to become a university researcher.

In Court Lord Justice Thorpe ruled that such agreements should be given 'due weight' because it was increasingly unrealistic to ignore them.

This case is a powerful indicator that the courts will now give weight to pre-nups in appropriate circumstances. However, an appeal is likely and it is too early to say to what extent this decision alters the law relating to pre-nups in the UK.

If you are getting married or forming a civil partnership and are worried about the preservation of family wealth in the unfortunate event of a divorce, a pre-nup can be a valuable tool. There are a number of steps which should be taken to ensure the agreement is maximally persuasive to the court. We can advise on pre-nuptial and post-nuptial agreements and all aspects of wealth preservation planning.

Partner Note
Reported variously, see http://news.bbc.co.uk/1/hi/uk/8130176.stm

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