Jun 2025

A prenuptial agreement is a contract entered into by prospective spouses before marriage, outlining how their assets, debts, and other financial matters will be handled in the event of divorce. A postnuptial agreement is a similar contract made after the marriage has already taken place. In the Cayman Islands, as in many common law jurisdictions, such nuptial agreements are increasingly used as an estate and asset protection tool, particularly where one or both parties bring substantial assets or expectations of inheritance into the marriage. They can also be useful in second marriages (to protect children from a prior marriage) or whenever parties wish to predetermine the division of property to avoid uncertainty in case of divorce.

Historically, prenuptial agreements were viewed with suspicion in English common law, often deemed contrary to public policy because they anticipated marital breakdown. Until the early 21st century, English courts would not give binding effect to pre-marital agreements. However, this landscape changed dramatically with the 2010 decision of the UK Supreme Court in Radmacher v Granatino [2010] UKSC 42. In Radmacher, the Court held that such agreements should be given significant weight so long as they are entered into freely by both parties with full appreciation of their implications, unless it would be unfair to hold the parties to their bargain. This marked a shift from viewing prenups as automatically unenforceable to treating them as an important factor in financial relief cases, provided certain safeguards are met.

The Cayman Islands, while having its own laws, often look to English legal precedents as highly persuasive (especially given that appeals from the Cayman Court can, in some cases, go to the Privy Council in the UK). The Radmacher decision, though not technically binding under Cayman law, is considered to be “highly persuasive” authority (see DJ v BJ (Grand Ct., 2019 (2) CILR 511). Following Radmacher, prenuptial agreements now form part of the considerations for Cayman courts in divorce proceedings. In practice, this means that Cayman family courts will generally respect the terms of a valid nuptial agreement, provided it meets the legal standards of fairness and voluntariness discussed below.

Enforceability Under Cayman Islands Law

Financial relief on divorce in the Cayman Islands is governed by the Matrimonial Causes Law (2005 Revision) (analogous to England’s Matrimonial Causes Act 1973). This law requires the court to consider “all the circumstances of the case” when dividing matrimonial assets. A nuptial agreement is not capable of ousting the court’s jurisdiction or overriding the statutory mandate to achieve a fair outcome. In other words, spouses cannot by private agreement deprive the Cayman Court of its ultimate authority to decide on an equitable division of assets. Any clause purporting to prevent a spouse from seeking relief from the court will not be effective. The court will always retain the power to adjust the parties’ financial arrangements on divorce, especially to ensure that the needs of each party and any children are met.

While not automatically binding, a properly executed prenuptial or postnuptial agreement is considered a “relevant circumstance” to which the Cayman court will give due weight. The Grand Court of the Cayman Islands has embraced the principle from Radmacher. Lord Phillips’ formulation in Radmacher – that “the court should give effect to a nuptial agreement freely entered into by each party with a full appreciation of its implications unless in the circumstances it would be unfair to hold them to it” – has been adopted in Cayman jurisprudence. This approach was confirmed in the landmark local case of DJ v BJ. In DJ v BJ, the Grand Court reviewed Radmacher and subsequent English cases and stated that “where there is a prenuptial agreement which is valid, in the sense that it is not negated by vitiating factors, a court should have regard to and give weight to the agreement except where it would be unfair to do so”. In that case, the Cayman court ultimately enforced the terms of the pre-nuptial agreement which provided for an equal division of the parties’ assets upon separation – assets which, absent the agreement, would likely have been considered non-matrimonial and not subject to equal sharing. This outcome illustrates that Cayman courts will uphold a nuptial agreement even where it produces a division that departs from the usual 50/50 starting point, so long as the agreement satisfies the required fairness criteria.

It should be noted that the Cayman Court’s supportive stance in DJ v BJ was subsequently affirmed by the Cayman Islands Court of Appeal, signalling clear approval at the appellate level of the Radmacher principles in Cayman. Thus, in Cayman as in England, a nuptial agreement can significantly influence – and in many cases determine – the financial outcome of a divorce, provided the agreement is valid and fair in the circumstances.

Whether a prenuptial or postnuptial agreement will be given effect in Cayman depends on several important safeguards. Drawing on the principles from Radmacher (as applied in DJ v BJ, and other recent cases such as AH v AW1 and AA v BB2), the key requirements include:

  • No Duress or Undue Influence: The agreement must have been entered into freely by both parties, without any coercion, pressure, or misrepresentation. If one party was pressured (for example, presented with an agreement on the eve of the wedding and pressured to sign), the agreement’s weight is greatly diminished or nullified.
  • Full Financial Disclosure: Each party should provide a full and frank disclosure of their financial circumstances before signing. This means revealing all significant assets, liabilities, income, and expectations of inheritance, so that each side understands what rights they may be giving up. A failure to disclose material assets can render the agreement suspect, as the disadvantaged party could later claim they would not have signed had they known the true financial picture.
  • Independent Legal Advice & Understanding: Ideally, both parties should receive independent legal advice from their own attorneys prior to executing the agreement. Independent counsel helps ensure that each party understands the terms and effect of the agreement. While independent advice is not an absolute requirement for validity, the absence of advice (or at least the informed opportunity to seek it) will raise questions about whether a party truly appreciated the agreement’s implications. The agreement should also be in a language the party understands or translated for them if not, and it should contain an attestation that the parties understand it is intended to govern the financial arrangements on divorce.
  • Fairness and Meeting Needs: The substance of the agreement must be fair at the time of the divorce. It should not leave one spouse in a predicament of real financial need while the other is enriched. For example, an agreement that one spouse receives nothing at all, or is left unable to meet basic housing or living needs, is unlikely to be enforced by the court. The agreement should at least make adequate provision for the “financial needs” of both spouses, and it cannot be used to contract out of the obligation to provide for any children of the marriage.
  • Proper Form and Execution: While Cayman law does not prescribe a specific form for nuptial agreements, it is advisable that the agreement be executed in a deed or similarly formal document, signed by both parties (and ideally witnessed or notarised). Ensuring the agreement is formally executed helps later to prove its validity (for instance, to counter an argument that a signature was forged or not duly given). Additionally, the agreement should expressly state the law governing it – typically Cayman Islands law if it’s intended to be used in Cayman divorce proceedings – and be drafted in compliance with that law.

If these criteria are met, the nuptial agreement is highly likely to be upheld by the Cayman Court as governing the financial split on divorce. The court’s role then generally becomes one of incorporating the agreement’s terms into an order, unless there are supervening circumstances that make doing so manifestly unfair.

It is worth noting that the distinction between pre- and post-nuptial agreements is minimal in terms of enforceability criteria. At one time, some legal authorities suggested postnuptial agreements (made after marriage) might be treated more favorably than prenuptial ones, on the theory that spouses could validly settle their financial affairs after marriage in a way they could not before (this was hinted in the Privy Council decision MacLeod v. MacLeod [2008] UKPC 64). However, the Radmacher court disagreed with drawing a sharp distinction, and indicated that the same principles of fairness and voluntariness apply to both types of agreements. The Cayman Courts have not yet had occasion (at the date of this article) to consider a contested postnuptial agreement in a reported case. Nonetheless, given the wholehearted adoption of Radmacher in DJ v BJ, it is expected that a postnuptial agreement would receive the same treatment as a prenuptial agreement in Cayman.

Practical Steps for Drafting and Executing Nuptial Agreements

Parties who wish to enter into a prenuptial or postnuptial agreement in the Cayman Islands should approach the task with careful planning and professional guidance. The following sets out practical steps and best practices to maximise the likelihood that the agreement will be upheld:

  • Engage Independent Legal Counsel Early: Each party should engage their own lawyer, experienced in Cayman Islands family law, well in advance of signing the agreement. Early engagement allows time for negotiation and avoids any claim that one party was ambushed. Independent legal advice for each spouse is critical – it ensures both understand the terms and consequences, and it strengthens the agreement’s enforceability. If a party chooses not to take legal advice, the agreement should explicitly state that the opportunity for independent advice was offered and declined, to show the party was aware of the right to counsel.
  • Provide Full Financial Disclosure: Both prospective spouses must prepare a complete disclosure of their financial situation. This typically involves exchanging sworn net-worth statements or schedules of assets and liabilities, including all significant property, bank accounts, investments, businesses, incomes, and potential inheritances. Full disclosure is essential to prevent later arguments that the agreement should be set aside due to hidden assets or misinformation.
  • Avoid Pressure or Duress: The timing and circumstances of the signing should be such that neither party feels unduly pressured. For prenuptial agreements, best practice is to finalise and sign the agreement well before the wedding date. Last-minute negotiations or presenting an agreement for the first time on the day before the wedding can be strong evidence of coercion. Ensure the signing is witnessed properly, in a calm setting, without one party (or their family) exerting undue influence over the other.
  • Consider Fairness and Future Needs: The parties should consider whether the outcome will be seen as fair if and when the agreement is invoked. While it is legitimate to protect separate property or limit sharing of certain assets, the agreement should not be unconscionably one-sided. It is also wise to include provisions for changed circumstances: for instance, how will the agreement treat assets acquired during the marriage, or what if one spouse becomes unable to work due to ill health? By anticipating such issues, the agreement is more likely to be deemed fair in the future.
  • Execute with Formalities: To lend the agreement maximum weight, execute it with appropriate formalities. Although not legally required, signing the agreement as a deed (with witnesses or a notary) is recommended. Each party should sign the final agreement, and have the signatures notarised if any assets or enforcement may involve foreign jurisdictions. Also, a governing law clause should be included (e.g., “This Agreement shall be governed by the laws of the Cayman Islands”) and a jurisdiction clause for where any disputes will be heard (often Cayman Islands courts if the parties reside there). This will prevent uncertainty if the parties later decide to move abroad. If the parties have international connections (such as assets or residences in other countries), we recommend seeking advice in those jurisdictions as well, or even execute mirror agreements in those jurisdictions, to ensure enforceability worldwide.
  • Incorporate Review and Update Mechanisms: Circumstances can change materially over the course of a marriage – for example, the birth of children, significant career changes, or windfalls like inheritances. It is prudent to include a review clause in the agreement, stating that the parties will revisit and confirm or update the agreement after a certain number of years or upon defined events (e.g. the birth of a child). Even if a formal review clause is not in place, the parties should consider updating or reaffirming the agreement when major life events occur.

Conclusion

Prenuptial and postnuptial agreements have become important instruments in Cayman Islands matrimonial law, offering couples a measure of certainty and control over their financial affairs in the event of a divorce. Under Cayman law, such agreements will be considered to be enforceable to the extent that they are entered into freely, with informed consent and full disclosure, and produce a fair result. They do not oust the jurisdiction of the court, but the Cayman Courts will uphold the parties’ arrangements unless there is good reason not to – such as fraud, duress, or a significant unfairness (particularly an agreement failing to meet the reasonable needs of the spouses or children).

As a matter of prudence, these agreements should be kept under review as the marriage evolves, and parties should remain mindful that life changes (birth of children, changes in fortune, etc.) may warrant revisiting the terms. With proper planning and drafting, prenuptial and postnuptial agreements can provide valuable protection and clarity, and Cayman Islands law – shaped by both local and English authorities – now provides a framework for their enforcement that balances party autonomy with the preservation of fairness and public policy.

1 AH v AW (CICA) (Civil) Appeal No 12 of 2021.

2 AA v BB (GC) (Fam) 118 of 2022.