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Valid prenups more likely to be upheld by the courts

A recent case held in the Family Court has strengthened the position of prenuptial agreements (prenups), indicating that the courts in England and Wales are more likely to uphold valid prenups in the future.

prenupsIn this case, the husband, 61 years old, lives in a property in the countryside in England, now valued at £4 million.  It was bought in joint names.  His wife, aged 51, lives in a property, solely owned by the husband, in London, now valued at £9.5 million.  There is also a property in the USA that was bought in joint names and the couple bought three plots of land in Mallorca for €2.4 million, two of which the husband has now sold.

The couple married in September 2005 and have two children, aged 15 and 14.  The wife looked after the children and the home.  It was the first marriage for the wife and the second for the husband.  The husband had two children in his previous marriage, both now in their late twenties.

Husband wealthy upon marriage

The husband was wealthy upon marriage, having net assets of £32.5 million at the time the prenup was signed in 2005.

The couple moved into the London property in the summer of 2004, before they were married. The husband had made it clear that there would be no marriage without a prenup. He suggested that in the event they divorced, he would pay the wife £300,000 for each year of their marriage.  Both took advice from eminent legal firms.

Couple disagree on prenup

The wife’s solicitor made it clear that, whilst prenups are not binding in English law, she should proceed on the basis that it would be upheld. The wife’s suggestion was:

  • £2 million on the second anniversary of their marriage
  • £600,000 per year after that
  • half the value of the London property after ten years of marriage – or this was to be held in trust until any children completed all education, including university
  • if there were children – child maintenance of £60,000 per annum
  • school fees for any children
  • this would cease after 20 years of marriage

The husband rejected the proposal of £2 million on the second anniversary and the £600,000 for each subsequent year, saying £300,000 – £400,000 would be more appropriate but also suggested a payment of 50% of the increase in the value of assets during the marriage if it was greater than the annual payments, with the whole provision being capped at 35% of his assets.

There followed an argument between the two – which is particularly relevant as the wife accused the husband of submitting her to undue pressure relating to the prenup (the judge disagreed with this.)

Final prenup agreed

The final prenup agreed that the wife would get:

  • £500,000 per year of marriage for the wife, to the maximum of £12.5 million on the 25th anniversary of marriage
  • half the value of the London property after eight years marriage or following the birth of children if earlier or 50% of the increase in assets, with a cap of 42% of his overall wealth, if higher than the above
  • child maintenance of £60,000 per year per child, to be increased in accordance with CPI after ten years
  • school fees and medical expenses
  • accommodation and reasonable financial support pending the conclusion of divorce proceedings, either at the same standard as she had enjoyed during the marriage or equivalent to the net income after tax that would be earned on the provision to which she was entitled overall
  • the agreement to cease if the marriage lasted 25 years

The couple agreed that the prenup should be legally binding and that each should retain any property they had before they met.  The husband showed assets of £32.5 million and the wife £62,000.

PrenupsThe marriage broke down in February 2019 and divorce proceedings followed.  At the time, the husband’s assets were valued at £44 million and the wife’s at £600,000.  She had also received around £2 million worth of gifts from her husband during the marriage.  The husband wanted to enforce the terms of the prenup, in which the wife would receive a settlement of £7 million, based on the figure of £500,00 per year.  He also offered to allow her to live in the London property until December 2030, at which point the proceeds would be split 50/50 or to sell the London property immediately and offer the wife £11.5 million.  He then offered a further lump sum of £500,000.  The wife disagreed with all offers as she thought that the prenup was unfair and that she had been coerced into signing it.

Disagreements upon breakdown of marriage

All negotiations between the couple failed and the case was heard by Mr Justice Moor in the High Court (Family Division).

The husband issued notice to show cause why financial remedies should not be dealt with in accordance with the prenup, but the wife wanted 40% of his total assets, i.e., £18 million.

The wife claimed that the prenup did not satisfy her financial needs and that she had signed it under duress, that her husband had behaved in a coercive and controlling manner and had said there would be no marriage without the prenup.  She said that both parties had made equal contributions to the marriage.  The judge agreed apart from the fact that she had ignored the unmatched £32.5 million he had brought into the marriage.  The judge was also mindful that both parties had received legal advice at the time, together with significant negotiations.  The husband accepted that the prenup was a condition of the marriage, but had fully accepted that and said it was fair.

The wife wanted over and above that which she would receive by way of the prenup, and she wanted to keep the London property.  She completely ignored the prenup.  The husband wanted to abide by the terms of the prenup, believing it to have been entered into fairly, providing a fair settlement for her.

Judge finds prenup fair

Mr Justice Moor found that the prenuptial agreement was fair and should be adhered to.  He said:

I am quite clear that there is no vitiating factor in this case that means that this PNA (prenup) should be ignored; nor is there any factor that means that I should give it less weight than would otherwise be the case. Litigants must realise that it is a significant step to instruct top lawyers to prepare a pre-nuptial agreement prior to marriage. It is highly likely they will be held to these agreements in the absence of something pretty fundamental that vitiates the agreement. These agreements are intended to give certainty. Those signing them need to know that the law in this country will provide that certainty. Litigants cannot expect to be released from the terms that they signed up to just because they don’t now like what they agreed.

And also:

“I conclude that the PNA provides a reasonable level of provision for the wife’s income fund. The figure is also not unfair.”


Bradie Pell

Bradie Pell, partner and head of Graysons’ family team says: “

“It may not be the most romantic thing to discuss what the division of your assets will look like if you divorce before you even get married, but this case shows that it is a sensible thing to do.  This case reinforces the fact that as long as proper advice is taken and the prenup is fair, it is more likely than ever to be upheld by the courts.  However, the courts will not uphold a prenup that is written to enforce a divorce settlement well below what the courts would have ordered.”

Author: Bradie Pell – partner and head of Graysons’ family department.

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