Posts Tagged 'prenuptial agreements'

Clean break via a pre-nuptial agreement

The Financial Times recently reported that professionals in the City and those working abroad are increasingly turning to pre-nuptial agreements in order to protect the savings and investments generated from their labour. These “new money nuptials” are a contradistinction to the “old money nuptials” which typically look to ring-fence assets inherited on the death of parents, grandparents etc.

So are pre-nuptial agreements binding and are they worth the “hassle”? To help breakdown the issues, let’s work with the following common example.

Jeremy is a British citizen who is getting married to Jenny, an Australian national who was schooled in England. They both currently live and work in Qatar taking advantage of the more favourable tax system. Jeremy is a civil engineer and Jenny an English language teacher. They plan to continue living in Qatar after marriage but do intend to return to England to set up a family. There is a significant imbalance in assets. Jeremy has roughly £1,500,000 in assets, including equity in a house in Cheltenham and investments. Jenny has a few thousand pounds in savings. Neither party is likely to inherit any significant sums.

The current position on pre-nuptials in English law is that weight would be given to them in the event of a disagreement provided certain factors are met. Importantly, the agreement must be fair in the prevailing circumstances and accompanied by some important formalities i.e. independent legal advice, absence any duress (pressure) and typically they are signed at least 21 days before the wedding.

Many pre-nuptials seek to ring-fence assets accrued before the marriage, so in Jeremy’s case the properties and investments, with the agreement essentially providing that the couple will, the event of a divorce, share the wealth they have built together – what might be called the “fruits of the marriage”. However, it is highly recommended that the pre-nuptial is periodically reviewed – it is important that neither party will be left without financial provision, and any children will need to be properly provided for. Staying with the above example, if Jeremy and Jenny have daughter, Jessica, the pre-nuptial would need to altered on Jess’ birth to take her into account and make sure she is provided for. So while there may be a clean break between Jeremy and Jenny on divorce, it is not possible for a parent to get a clean break from a child and issues such as child maintenance will need to be considered.

In terms of their benefits, pre-nuptials offer the likes of Jeremy and Jenny the certainty of knowing what will happen in the event of a divorce. The fact they currently live in Qatar is not necessarily a “deal-breaker” – a clause can be entered into the agreement which provides that both parties agree at the outset that any later dispute will be dealt with by English courts applying English law. More than this though, given the cost of a prenuptial is significantly less than court proceedings post divorce it really does pay to discuss and draft a prenuptial.

Traditionally many people like to sit down with their solicitors and discuss matters, nowadays with Skype it is often possible to discuss matters via the web. Papers can be faxed and sent via email.

Please contact Rebecca Silcock if you have any questions relating to pre-nuptials.


Beware of the Prenups! A warning from the Aussies!

With the Law Commission considering the change of legislation providing for the validity of prenuptial agreements in the courts of England & Wales following the decision of the Supreme Court in Radmacher and Granatino last October, Australian lawyers are advising that they are shying away from drafting such agreements following a raft of insurance claims for negligence.

With more of us undertaking Prenup work following the Radmacher ruling it was interesting to hear Paul Doolan from Barkus Doolan Kelly based in Sydney address us at the International Academy of Matrimonial Lawyers (IAML) conference in Harrogate in September where he informed us that prenuptial agreements have been part of the Australian landscape for over ten years and cover the issues of property and spousal maintenance.

He stated that the Australian Courts had adopted a very strict approach to interpreting the agreements. Initially as a result of the mandatory language of the governing legislation, many agreements faced being
struck out through minor provisions being breached. The law was changed retrospectively to ensure that hundreds if not thousands of Agreements would not be declared as non-binding.

Far from reducing the number of applications to court, Paul said that there had been an increase in litigation in seeking to confirm whether or not they should be binding based upon some of these technicalities.
Lawyers are now considering very carefully whether or not they should take on such work as premiums for professional indemnity are increasing dramatically due to the potential for professional negligence claims.

The recent case of Wallace & Stelzer was brought before the Australian Court where the husband sought to challenge the Prenup on the basis that the agreement was flawed for various reasons of a technical nature but also that representations made by his wife that “she loved him, wanted to have children with him and wanted to live with him for the rest of her life” taken with other statements and modes of behaviour on her part were
evidence of fraud and unconscionability on her part.

The Judge ruled in favour of the wife and upheld the provision to provide $3.25m from the husband’s $16m assets.

With increasing couples marrying later in life with acquired assets or second time around, I continue to foresee an ongoing rise in instructions in this work. I am sure that with most European jurisdictions already recognising such agreements, England and Wales will follow suit.

No doubt today’s breaking news that the Duchess of Alba at 85 is set to marry again will continue the debate as to whether she will have ensured that her £3bn wealth has been protected for the benefit of her children.

Prenup, pilot and murder charge.

For years many said prenups were not worth the paper they were written on, but since the decision in Radmacher and Granatino last year, one individual was convinced of its effectiveness that he killed his wife over it.

The trial continues of BA pilot Robert Brown who admits killing his millionairess wife Joanna in October last year but denies murder.

It is alleged that Mr Brown killed his wealthy wife and buried her body in a pre-prepared grave because he had been stitched up by the prenuptial agreement they had signed. His lawyer claimed that his wife had deliberately concealed the extent of her wealth and then convinced himself their marriage had been a sham.

The couple who were married in 1999 and had two children aged 9 and 11 had signed a prenup prior to the wedding.  By 2007 their relationship had broken down and their divorce proceedings are described as “acrimonious and bitterly contested”

The prenup prevented Mr Brown from making any claim upon the ownership of the £3million marital home even though he had invested £200,000 of his own money to turn it into an upmarket bed and breakfast hotel. He had no claim on his wife’s inheritance from her property developer father which is said to have run into millions.

On 31st October last year Mr Brown said he flipped and attacked Mrs Brown with a mallet. The trial continues at Reading County Court.

I note from the Global Times in China that a recent survey published on 11th May that in large cities such as Beijing and Shanghai that less than 5% of married couples have prenuptial agreements. The survey by Horizon Research Consultancy Group conducted the survey across China’s 10 largest cities.

The survey stated that 25.4% of the respondents believed that such an agreement implies a lack of trust between them and a further 22% felt they would be damaging to the relationship.

I wonder if a similar survey conducted across Europe would come out with the same figures.

Hear about the waiter and the millionairess?

Sadly there was a very cruel punchline for Mr Traversa who after over 20 years of marriage to his wealthy wife came out of an Italian court with no capital but a maintenance order to his wife. Having been forced out of the matrimonial home and having earlier applications dismissed there may now be some hope. 

Last week the England & Wales Court of Appeal granted Mr Traversa leave to apply for financial support under part III of the Matrimonial and Family Proceedings Act 1984, which means that the UK court will consider his application and potentially order him a reasonable payout.

The parties married in Italy in 1987, separated in 2001 and finally divorced in 2008.  Mr Traversa now a waiter in London at the time of the hearing owed £57,000 in maintenance arrears to his millionairess wife following the terms of the Italian court order and a prenuptial agreement.

In April 2009 his application to the High Court was rejected but since then the Supreme Court has delivered judgments in the Radmacher case, which also dealt with a foreign pre nuptial agreement, and in Agbaje v Agbaje where another Part III case was considered.

 The Court of Appeal have agreed with his arguments that the High Court judge wrongly concluded that Italy was the convenient forum for the divorce and the Brescia Court dealt with him unfairly.

Whilst we await the outcome, we are now seeing an increasing number of cases of people who are unhappy with awards made in foreign jurisdictions and are seeking advice on applications to the English courts for a second bite of the cherry where one of them has a significant connection with this country.

At present across Europe the party who issues first will generally determine the jurisdiction for where the case is to be heard and on occasions it will be advantageous to one party for this to continue, however now that those with a connection to the UK may have perhaps a lifeline if everything does not go to plan.

For more information or advice on a part III application please contact or +44 (0) 1225 750072

Prenups and divorce insurance.

The Law Commission begins public consultation today on full recognition for pre-nuptial agreements to be recognised by English law. Interested parties have until 11th April 2011 to provide responses. It can be found at

This consultation has been delayed until now after its initial preparation in 2009 in view of the recent Supreme Court’s ruling in the case of Radmacher v Granatino. The prenup agreement in that case being upheld in favour of the wife.  This has led to the increasing voice that many couples want to protect assets prior to marriage so that in the event of a divorce that they will not have to enter into costly litigation to fight off the claims of a partner who before the marriage was content to marry for love and not money.

Prenuptial agreements should work as long as the safety nets are in place to protect the vulnerable and by this I would refer to couples who subsequently have children or the weaker partner in financial terms. Safety nets would require full disclosure of both parties position, the regular review of the document, the need for independent legal advice and sufficient time in advance of the wedding for consideration to be given.  All of these points are included within the Executive Summary provided by the Commission.

But in my view at the beginning of the relationship, neither party is expecting to receive anything from the other and upon formalising that relationship couples should be encouraged to consider protecting themselves. They are more likely to agree matters in advance of a wedding than after when a wide range of emotions may be present particularly in view of how the marriage has broken down.

So that brings me onto divorce insurance, it is available in some states in the USA and also on the continent. You can insure against most things these days so why not divorce? No doubt insurance institutions are looking at this market given that currently more than 100,000 marriages end each year in divorce but how to quantify the premiums and benefits is clearly an interesting point.

Could there be a requirement for a prenup? Does the insurance have to be repaid upon a reconciliation, are you insuring against the lawyers fees or settlement amount or cost of rebuilding a life following a divorce? Would both parties have large one-off premiums or would you pay monthly by direct debit? I am sure it will not be long until it is available but whether the costs would be prohibitive and beyond many pockets remains a question.    

The UK press has numerous articles at this time of year about Family law issues some of them regarding the so-called “D-day” where D stands for divorce being typically the first day back in the office following the New Year break as couples rush to take advice following separations and arguments over Christmas and New Year.

According to the Family Mediation Helpline 1.8m couples contemplate divorce over the Christmas period and Relate report a massive surge in calls during the festive season. Clearly no qualifications are necessary explain the numerous pressures that family’s experience during this time.  Couples have to cope with the financial pressures and practical  arrangements such as which family to see and when. They also have to deal with the biggest hurdle of having to spend extended time together as a family. This can be a significant change of routine for both parties and as such can lead to a breakdown in communication and ultimately separations.

The Festive time is also a time when many couples become engaged and so whilst the negativity of the New Year press reports paint a picture of doom and gloom it is the start of many couples planning for the future together and hopefully they will not be put off.  Many couples still consider that marriage is important and with a Royal wedding in April highlighting this point perhaps my recommendations for all couples to take advice upon a prenup continues this negativity but then as a lawyer would you expect anything else?

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 428 other followers

Mogers Solicitors