Features pre-nuptial agreements i love you forever. now just sign here… High-profile divorce settlements such as that won by Heather Mills against Paul McCartney have seen pre-nuptial agreements soar. By Richard Powell

This summer, a groundbreaking However, it was a battle between two at the height of his career he was earning judgment by the Court of Appeal allied foreign nationals living in , who around £325k a year. itself with a view long-held by the rest had signed a pre-nuptial agreement – Prior to their marriage, the parties of the legal world: that married couples where the moneyed party was the wife signed a German-style pre-nuptial should be able to organise their own – that has completely turned the notion agreement which barred Granatino’s financial affairs in the event of a divorce. of London as the divorce capital of the financial claims against his wife. Lawyers have, for over 150 years in world on its head. On their divorce in the High England, pushed and prodded its archaic French-born banker Nicholas Court, Mrs Justice Baron considered legal system in a bid to stop their high net Granatino and the German heiress Katrin that Granatino’s award should be worth clients being taken to the cleaners Radmacher, said to be worth £100m, “circumscribed to a degree” to reflect by spouses who arrive with little capital married in 1998. At the time, Radmacher the fact that he had signed a marriage and attempt to leave with a lot. ran a boutique in Beauchamp Place, and contract. He was awarded £2.5m for a Recent cases have been well-reported: Granatino worked for JP Morgan where home, £700k to pay off his debts and Sir Paul McCartney, hit with a £24m £2.3m which he could draw on for the Illustrat i on settlement after four years’ marriage to rest of his life to provide him with an Heather Mills; New Star fund manager ●● income. Radmacher was also ordered to Alan Miller ordered to pay his former pay her former husband £25k for a new by Echo Chernik, www.echo-x.com wife £5m after a childless two-year long The view of car and fund the costs of a furnished marriage; Deloitte partner Kenneth house in Germany for her former McFarlane losing the family house and London as the husband, to enable him to visit their a third of his annual £750k salary every children at the weekends. year for the rest of his life to his wife, and world’s divorce But at the Court of Appeal, judges in 2006, Lloyds insurance tycoon John considered that the position of pre-nups Charman’s wife Beverly, awarded a £48m capital is now being void in England for public policy payout in Britain’s largest-ever contested reasons was at best questionable in divorce settlement. out of date modern times, particularly in a case ▶

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●● principles: first, that there should be due 65 pages, while back in Britain, Sir Paul respect for adult autonomy – responsible McCartney apparently declined to ask Judges said pre- adults should be allowed to decide his belle Heather Mills to sign one on the the financial fate of their marriage grounds that it was unromantic – and look nups can and, themselves without excessive interference what happened to him. from a nanny state; and second, that the More recent is the case of pre-nup free in the right case, old public policy argument reflects the comedy legend John Cleese, married to laws and morals of earlier generations. third wife Alyce for 15 years. She lived in should be taken “The Court of Appeal has enabled a council flat when they met. There are no English matrimonial law to catch up with dependent children. Yet she was awarded into account the rest of the world so that grown-ups £8 million in cash and assets plus more can agree in the best of times what will than £600k annually for the next seven ▶ involving international parties where happen in the worst of times,” she added. years by a California court in August ... the type of agreement they had entered The trailblazing lawyer, whose firm leaving her wealthier than him. “What into was commonplace and binding in Ayesha Vardag Solicitors works at the I find so unfair is that if we both died their respective homelands. They said cutting edge of family law, said that today, her children would get much more that legislative change will have to await responsible adults, often coming into than mine,” Cleese said. the review of a pending Law Commission second and third marriages, want to be “Should’ve got a pre-nup” say lawyers. but in the meantime the Matrimonial able to organise their affairs in a way that Cleese’s final words on divorce day? Causes Act required nothing to be ruled protects their hard-won security in life “I got off lightly. Think what I’d have out and nothing to be ruled in when and that of their children. had to pay Alyce if she’d contributed deciding who gets what on divorce. As “Marriage is a legal status with anything to the relationship.” ■ such, they said, pre-nups can and, in the significant financial implications. If we right case, should be taken into account. are free to contract in other areas of our They reduced Mr Granatino’s lives, why not in this?” Vardag asks. Pre-nups & Downs... award by holding that the house Mrs The law on division of financial assets Radmacher must provide to him as father used to ensure only that the ‘reasonable • A pre-nuptial agreement is a written to their children should revert to her needs’ of the financially weaker party – deed signed between couples before once their youngest daughter turns 22, usually the wife – were met as a result of they get married that sets out how their in 15 years, and that the £2.3m lump sum the settlement. But the situation changed assets and liabilities should be treated if the marriage fails. In drawing one up, he had been given to provide him with in 2000, when Pamela White, a former both parties come to the table and lay an income for life should be reduced farmer’s wife who had worked in the out their assets, debts and incomes. to provide him with an income for 15 family business and felt she was entitled years, when his financial responsibilities to half the farm as a result, took her case • For courts to respect pre-nups in in providing for his daughters as a to the House of Lords. their entirety they ordinarily should meet the criteria that defines all homemaker will come to an end. It decided that where there were contracts between people in close Ayesha Vardag, the top London assets that were in excess of both parties’ relationships; these include both parties divorce lawyer who saw off Granatino’s needs, it was wrong to limit a wife understanding the agreement, no formidable legal team – Fiona Shackleton leaving a long marriage to provision for undue pressure to sign, consideration and Nicholas Mostyn QC – and won the her ‘reasonable needs’. being given to child provision and the appeal for Katrin Radmacher along with To guard against the courts applying opportunity to take legal advice. Richard Todd QC, said: “For 160 years their varying interpretations of this,

• According to accountants Grant Illustrat i on pre-nuptial contracts were said to be void lawyers say the moneyed party in a Thornton, most English lawyers now for public policy reasons. They were relationship should strongly consider back legally binding pre-nups. They put in the same category as contracts a pre-nup prior to entering into what recently reported that demand for to kill your hated spouse. Now, is the most important contract of their pre- and post-nuptial agreements by Echo Chernik, www.echo-x.com in a landmark judgment, three lives, as a form of insurance that they will soared last year, with three-quarters of the most highly-respected hopefully never need. of English family lawyers saying they judges in the land ruled that When pop star divorced are drawing more up. pre-nups can be decisive in husband Kevin Federline in the US in • The Law Commission’s investigation determining the financial 2006, he received just $1m dollars from into the future validity and effect of division on divorce. her estate, estimated to be worth between pre-nups is due to commence towards “[The judge] $50m and $100m. Spears had insisted that the end of the year, with a report and praised two her husband-to-be sign an iron-clad pre- draft Bill expected in late 2012. modern nuptial agreement running to a reported

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