Last updated on March 30th, 2022 at 03:24 pm
Why a prenup could help in a high-net-worth divorce/dissolution and why do they differ from normal divorces/dissolutions?
Divorces/dissolutions are stressful and emotional for both parties, with division of assets, maintenance, and child custody all having to be taken into consideration. Reaching a financial agreement is often the most contentious aspect of ending a marriage/civil partnership. This is especially the case in high-net-worth divorces, where there may be complicated finances and multiple high-value assets. Often high-net-worth divorces/dissolutions will involve a prenuptial agreement. However, this isn’t always the case, and while prenups can offer some protection, they are not necessarily legally binding. Whether you are the financially stronger party or the economically weaker party, if you are considering a high-net-worth divorce, it is essential that you engage the services of a specialised high-net-worth divorce lawyer. Here, Graysons’ team of Sheffield, Chesterfield and Hathersage solicitors answer some of the most commonly asked questions about high-net-worth divorce and prenuptial agreements.
What is a prenuptial agreement in England and Wales?
A prenuptial agreement (sometimes called a prenup or pre-marriage agreement) or pre-registration agreement (in the case of civil partnership dissolution) in England and Wales, outlines how assets should be divided in the event the marriage/civil partnership comes to an end. This is also sometimes referred to as a is a legal contract drawn up between you and your partner. Many people use a pre-marriage agreement, especially high-net-worth (HNW) and ultra-high-net-worth (UHNW) individuals, to help protect their wealth in the event of a divorce. Prenuptial agreements can also be used to protect future wealth, if one partner knows that they are likely to come into significant wealth through an inheritance, or to protect assets for any children from a previous marriage/civil partnership. When drawing up a prenuptial agreement, it is important that you work with an experienced prenup marriage lawyer, such as Graysons’ team of solicitors in Sheffield, Chesterfield and Hathersage.
What is a high-net-worth divorce?
A high-net-worth divorce will involve significant, and sometimes complex, assets, that exceed both parties’ financial needs. Reaching a financial agreement in HNW or UHNW divorces/dissolutions can be difficult and time-consuming as there are multiple assets to be considered. Assets in high-net-worth divorces may include a portfolio of properties (including the marital property), trusts, investments, stocks and shares, pensions, business assets, and in some cases off-shore assets. Assets may also include high-value motor vehicles, yachts, jewellery, antiques and artworks . Many high-net-worth divorces/dissolutions will involve prenuptial agreements. During a high-net-worth divorce/dissolution, it is imperative that you work with a highly skilled and experienced HNW divorce lawyer, such as the team of Sheffield, Chesterfield and Hathersage divorce solicitors at Graysons. A high-net-worth divorce solicitor will be able to outline what you are entitled to and work to ensure you the very best outcome, whether you are the financially stronger or weaker party.
How does a HNW divorce/dissolution differ from a regular divorce/dissolution?
A HNW divorce/dissolution is different from a regular divorce/dissolution as it will involve complex financial, business and legal issues. Unlike a regular divorce/dissolution, a HNW divorce will often involve a range of assets such as trusts, multiple properties and business interests, as well as offshore assets. While obtaining disclosure about assets in England and Wales is relatively straightforward, obtaining disclosure about offshore assets can be complex. Prior to divorce/dissolution proceedings, high-net-worth individuals who know they may be facing a divorce/dissolution may seek to move their assets offshore in an attempt to protect them from division during divorce/dissolution proceedings. Additionally, valuing private businesses, and dividing up businesses in a high-net-worth divorce, is often difficult. It is critical that you work with an experienced divorce/dissolution lawyer with expertise on HNW divorces/dissolutions.
How can a high-net-worth divorce/dissolution lawyer help me?
If you believe you are going to go through a HNW divorce or dissolution, it is imperative that you engage the services of a highly skilled divorce/dissolution lawyer with experience of dealing with high-net-worth divorces/dissolutions, such as Graysons’ team of Sheffield, Chesterfield and Hathersage divorce solicitors. In some cases, the wealthier party will attempt to move or dispose of financial assets so that they are protected from any division of assets during the divorce/dissolution. If you act quickly, a divorce/dissolution lawyer will be able to freeze assets to prevent this from happening.
Are pre-marriage agreements legally binding in the England and Wales?
Pre-marriage agreements are not legally binding in England and Wales. However, they can help limit potential claims against assets in the event of a divorce or dissolution. Having a prenuptial agreement in place can also help lower the risk of costly litigation – if both parties agree to honour the prenup’s terms. Should a divorce/dissolution end up in contested court proceedings, a prenup will be taken into consideration, with courts generally upholding prenups as long as they have been correctly drafted. To ensure any prenup agreement is as watertight as possible, it is vital that you work with an experienced prenup lawyer, such as Graysons’ team of Sheffield, Chesterfield and Hathersage solicitors.
How can a high-net-worth pre-marriage agreement protect family wealth in the event of a divorce/dissolution?
A pre-marriage agreement, or prenup, can help protect family wealth in a divorce by ringfencing certain assets from division. A high-net-worth pre-marriage agreement may exclude certain assets from division in a financial agreement, such as business interests, past or future inheritances, property, savings, trust funds, investments (such as stocks and shares) and pensions. While prenups are not legally binding in England and Wales, significant weight is given to them by the courts. When drawing up a high-net-worth pre-marriage agreement, it is important that you work with an experienced prenup solicitor, such as Graysons’ team of solicitors in Sheffield, Chesterfield and Hathersage.
Can a prenup agreement be challenged during a high-net-worth divorce/dissolution?
Yes, a prenup agreement can be challenged during a high-net-worth divorce as they are not legally binding in England and Wales. If you are ending your marriage and want to challenge a prenuptial agreement, you will need to work with an experienced divorce lawyer, such as Graysons’ team of Sheffield, Chesterfield and Hathersage divorce solicitors. There are various ways in which a prenup can be challenged, including:
- Incomplete or false information; for example, the prenuptial agreement does not fully disclose all assets
- Duress; for example, one party was pressured into signing the pre-marriage agreement
- Mental incapacity ; for example, one party, or both parties, did not have the mental capacity to understand what they were signing
- Unfairness or unreasonableness ; for example, if the prenuptial agreement inappropriately favours one party over the other and would leave the financially weaker spouse facing financial hardship
How can Graysons’ solicitors in Sheffield, Chesterfield and Hathersage help?
Graysons’ boasts a highly skilled team of divorce lawyers and prenup solicitors in Sheffield, Chesterfield and Hathersage who are experienced in working with high-net-worth and ultra-high-net-worth individuals. If you are considering a HNW or UHNW divorce or dissolution, or need help with a prenuptial agreement to protect your wealth in the event of a divorce or dissolution, then contact our team today.