14 October, 2014
"My Husband and I did not sign a pre-nuptial agreement. We signed a mutual suicide pact." Those were the words of Roseanne Barr when divorcing her actor husband Tom Arnold. She had apparently sacked her lawyers when
they suggested that she make a pre-nuptial agreement, considering it an un-romantic gesture.
Roseanne's sense of humour clearly wasn't lost along with the $50 million which she paid as a result of the divorce! Whilst the law in England and Wales does not currently recognise pre-nuptial agreements the Law Commission says that they should be legally binding in divorce settlements, although only once the needs of the separating couple and
any children have been taken into account.
In 2010, in a case involving German Heir Katrin Radmacher, the Courts recognised the enforceability of pre-nuptial agreements as Radmacher sought to protect her £106 million fortune in the event of a marriage breakdown. In light of this case, the likelihood is that pre-nuptial agreements will be binding, provided that certain criteria are met. There has been a significant rise in the number of people asking for pre-nuptial agreements, certainly from my experience. This would seem to reflect the fact that couples of all levels of wealth are realising they may be able to benefit from taking this practical step.
Couples taking steps towards making this type of agreement are put off by the perception that it is not the most romantic of gestures, and that at the moment, there is no guarantee that the court would uphold that agreement.
However, the pre-nup's popularity amongst celebrity couples and the apparent movement forward by the courts to give weight to these types of agreement (providing certain criteria are met), has resulted in more people taking the step, regardless of the extent of their wealth. Over 40% of marriages end in divorce and so pre-nups are becoming more popular between partners who in particular have built up sizeable assets, and are perhaps on their second or third marriages.
It is a common misconception that pre-nups are there for one party to make sure that their partner gets nothing. However the court would not uphold an agreement providing for an unfair outcome. Both parties need to be involved and separately represented in the process of making an agreement.
Pre-nups can also be used to try to regulate the behaviour of the parties during the marriage. For example, there have been instances of parties insisting that their partner suffer a financial penalty if they gain weight during the marriage, if they are unkind or rude to their in-laws, or if they have an affair!
My top tip - Do not leave it until the week before the wedding to "get a pre-nup"! You should take advice at least 3 months prior to the wedding as your partner will be expected to take independent legal advice. There are a number of formalities that need to be observed and my own experience is that the mention of a pre-nup is not itself the problem; it is how the process is tackled, and trying to reach an agreement at the 11th hour is never desirable. In any event, the Law Commission's proposals are apparently going to insist that the agreement should be completed and signed at least 28 days before the wedding.
In short, take advice at least several months prior to the wedding you have planned, that initial meeting will cost very little compared to the potential cost of an acrimonious divorce.