I was reading the blog of one of my new followers here http://blog.divorce-online.co.uk/?p=143 and, always intrigued by what is going on over the pond, I found this post about prenuptial agreements. Just to give you a heads up/summary, over the pond (in the UK) there is a case pending before the Appeals court involving a German heiress named Katrin Radmacher and her French born husband named Nicolas Granatino. Katrin, 39, (but you can’t tell that from this pic http://www.telegraph.co.uk/news/uknews/5230709/German-heiress-Katrin-Radmacher-warned-pre-nup-legal-bid-likely-to-fail.html) is said to be one of the richest women in Germany and she basically had her indigent, penniless husband (well, he was a former investment banker turned doctoral student) sign a prenup years back, 3 months before the wedding, in Germany, that said if they divorce, he gets zilch.
The husband challenged the enforcement and the lower court had ruled that Katrin had to pay her ex about $5.6 million of her $150 million fortune, in spite of the fact that he’d signed that prenup, because the agreement was “unfair.”
UK courts have traditionally basically spat at pre-nups and have not enforced them, apparently. It is not like here in America, and in New York specifically, where, absent fraud (see Pommer v. Trustco Bank, 183 AD 2d 976) or a showing that the parties did not satisfy the formal requirements of the statute to wit: a signed agreement by both parties, acknowledged, notarized and in the manner of a deed to be recorded, that the prenup is presumed a valid contract. See Sunshine v. Sunshine, 51 AD 2d 326.
Although the judge recognised that the pre-nuptial agreement would have been fully enforceable in Germany or France, they have never been legally binding here. She also said that the arrival of the couple’s children had “so changed the landscape” that it should be set aside, and awarded Mr Granatino £5,560,000. The pair’s marriage floundered after Mr Granatino, 37, formerly an investment banker with JP Morgan, gave up highly lucrative job working in the emerging markets sector in 2003 to become a £30,000 a year biotechnology researcher at Oxford University. They divorced in 2006.
The wife in the case basically said, “if he wants to be a student, he should live like one.” He argues that he didn’t know she was loaded when he signed the agreement.
Well, here in New York, the wife would not be under any obligation to disclose she was loaded prior to executing a prenup. You don’t get FULL DISCLOSURE until you marry. See Eckstein v. Echstein, 129 AD 2d 552 But the fact that she gives him nothing in the prenup when she is loaded may be a problem. There is a public policy against having a spouse become a “public charge” when the other spouse has the financial means to provide support–regardless of what the prenup says. See General Obligations Laws section 5-311 and Domestic Relations Laws Part 236(B)(3).
Plus, as I said, if you can show duress, fraud or undue influence, you can probably strike the prenup. Here, the husband signed the prenup 3 months before the wedding. I don’t think he has an undue influence claim or, for that matter, a duress claim. Wife was under no duty to tell him she was loaded. So there is no fraud claim. But is this agreement “manifestly unfair”? Especially since he seems broke and is just a student with no money? It arguably is. She’s going to have to give him a little something. I don’t think she can get out of this by giving him the zilch they contracted for. I don’t know about $5.6 million. But she’s going to have to cough up something. Also, if he gets custody, then you are looking at significant child support, I’m sure. I think I read there are a couple of kids at least.
What are prenups and why do people want them and should you get one? Prenups are essentially how you sign your marital rights away. Everything from alimony, to your share of your spouse’s estate when he or she dies. But these antenuptial contracts are also a way of protecting yourself if you are the monied spouse from the digging hands of a “gold-digger” who wants to take you for every dime when and if the marriage implodes. (BTW I don’t like the term “gold-digger” as a general rule. I use it but I am uncomfortable with it. It connotes something very negative about women which in many cases is unfair. Nobody’s ever called a man a gold-digger and so….)
In any event. Should you sign a prenup? Yea. Why not? But just know that depending on where you live when you get divorced, it may not mean squat. Katrin Radmacher’s prenup is barely worth the paper she wrote it on, pretty much. If she was a little more generous, it would have been upheld in all likelihood, probably. Had she offered him about $150K, she may have gotten away with it. But she was really ungenerous and now, she’ going to be taken for $5.6 million. Absent that, she should have thought about it, and moved to Germany to get the divorce there. That agreement would have probably been upheld in Germany or France. But not England. As I said, they seem to spit at prenups over there, big time.
It’s all about location, folks. Not just in real estate. In divorce too. Where you get your divorce will determine how much you get or lose and whether your prenup will be enforced. Remember that. LOCATION. LOCATION. LOCATION. That’s the game.
PRENUP RELATED POSTS: http://www.divorcesaloon.com/index.php?s=prenup