Melania Trump renegotiates her pre-nuptial agreement... should you?
- AuthorNeil Denny
Vanity Fair recently reported that Melania Trump has renegotiated her pre-nuptial agreement (we'll call them pre-nups) with Donald Trump as a result of his various legal woes.
Her actions should be seen as a timely reminder that pre-nups need to be reviewed from time to time and many pre-nups actually have review clauses written into them.
Why should you review a pre-nuptial agreement?
Pre-nups are only useful if they can be relied upon at the end of a marriage.
The court will be more likely to uphold the agreement provided that it was "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 the agreement." Paragraph 75 of the leading case of Radmacher v Granatino
It is that last, italicised, provision that requires periodical reviews.
If an agreed pre-nup is no longer fair at the time that it comes to be relied upon, then the court can make alternative provision.
The result would be that one party would receive more – and the other would pay more – that had previously been agreed.
Periodic reviews will ensure that the intent of what has been agreed can continue to be refined with the passage of time or where there are changes in circumstances.
What events might require a review?
- Children – if the arrival of children is not factored into the provision to be made at the end of a marriage then a court is more likely to disregard the pre-nup on the basis that the new circumstances render the agreement to be unfair or inadequate.
- Serious ill-health, incapacity or a bankruptcy event – these situations will dramatically impact one or both partners' ability to provide for themselves. For that reason, relying upon what was previously agreed might no longer be fair.
Illness might also require there to be greater provision in order to meet more expensive needs, perhaps for adapted housing or additional care needs. The previously agreed level will need to revised and altered accordingly.
Alternatively, as with Trump, concern about what assets might be left after legal proceedings, might require a re-appraisal of how the needs to provide for both partners, and any children, can be provided for given an altered fiscal landscape.
- The mere passage of time – there is a standard clause in many pre-nups that there will be a review if there has not been a review in the preceding five years. This can serve as a catch-all review opportunity. Do any of the changed circumstances addressed above apply?
Are there external changes, such as increases in housing or living costs, that make a previous agreement inadequate to meet needs and, therefore, unfair?
Even if there is no change in circumstance, having a record of a formal review and agreeing to change nothing will help to bolster the implementation of the pre-nup at the end of a marriage.
The argument would be that "We have actively considered whether we still want to be bound by these terms within the last five years and we agreed that we do."
Contrast that with a situation where the pre-nuptial agreement has never been reviewed over the course of a ten to twenty year relationship.
It might be possible in that case for one party to argue that the pre-nuptial agreement should not be binding precisely because it was never reviewed and, therefore, hold out for a larger settlement. The argument now would be "We agreed that ages ago and everyone forgot about it. It would not be fair now to hold me to an old, forgotten and increasingly out of date agreement that never got reviewed."
Let us help you review your pre-nuptial agreement
Chattertons Solicitors are experienced in dealing with pre-nuptial agreements and will be happy to help you consider what you need to do. Reviewing a pre-nup is likely to be a fairly amicable and cost effective process, especially if the need for a review is recognised by both partners.