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Are pre-nuptial agreements just for wealthy couples?

Divorce solicitor Helen Warren explains why pre-nuptial agreements, or pre-nups, aren’t just for wealthy couples, and why all couples considering marriage or civil partnership should consider a pre-nup.

You may have read in the news that Rupert Murdoch, now 92, has not been put off by four failed marriages and is planning on marrying again for the fifth time.  It is reported he is worth 19.6 billion USD.  No doubt his children from previous relationships will be urging him to sign a pre-nuptial agreement to protect his wealth!

You do not have to be as wealthy or have a net worth anywhere near Rupert Murdoch’s to enter into a pre-nuptial or pre-civil partnership agreement. 

What is a pre-nuptial agreement?

A pre-nup is a contractual agreement made between a couple before they marry which specifies who gets what if the marriage or civil partnership ends. Prenups can set out who owns what, what will happen with the couple’s assets, debts, and income if they separate and divorce, and the country in which divorce proceedings should take place.

What assets can be covered by a pre-nuptial agreement?

It can detail assets such as:

i. a house you may have owned before the relationship started

ii. inherited property

iii. valuables, such as cars, jewellery or artworks

If you own or have a share of a business you may wish to protect this from any possible future claim by your future spouse or civil partner.  In your agreement, you will need to have agreed that your future spouse or civil partner waives all rights to an interest in the business in the case of divorce.

In fact, the document can outline anything of importance to you that you would wish to keep if your marriage or civil partnership fails at any stage. 

Why do I need a pre-nuptial agreement?

Married couples and civil partners have certain legal obligations to each other and the court will divide finances and property on divorce in accordance with the law and usually based on needs. 

It is therefore essential, if you are considering getting married or entering into a civil partnership and you have anything of importance which you would wish to hold on to should the relationship break down at a later stage, that you protect yourself with a pre-nuptial agreement or pre-civil partnership agreement.

Pre-nuptial agreements are binding with the benefit of legal advice

Couples who enter into pre- or post-nuptial or civil partnership agreements with the benefit of legal advice can now expect to be bound by them. The case of MN v AN [2023] EWHC 613 (Fam) is a very recent reminder of the court’s position that valid pre-nuptial agreements will be upheld if challenged on divorce. This case reinforces the position that courts should enforce fair pre-nuptial agreements that are not tainted by duress.

In this case the parties entered into a pre-nuptial agreement. Prior to the marriage, the husband owned assets totalling £32.5 million in contrast to the wife’s assets of £62,000. After negotiations the pre-nuptial agreement provided that:

  • The wife would receive £500,000 for each complete year of the marriage to a maximum of £12.5 million on the 25th anniversary of the marriage;
  • The wife would receive 50% of the value of the family home on the 8th anniversary of the agreement or on the birth of children, or 50% of the net marital assets if greater;
  • If there were children, maintenance would be paid at £60,000 per annum per child, plus school fees and medical expenses; and
  • The agreement would fall away after 25 years.

The marriage broke down after 14 years. The husband sought to rely on the terms of the pre-nuptial agreement, which at the time would give the wife a total of £11.75 million to meet her income and capital needs.

The wife however argued that the pre-nuptial agreement should not be upheld and sought £18.1 million. 

The Judge found that the pre-nuptial  agreement was not unfair and met the wife’s needs. 

Where parties have instructed lawyers to prepare and advise on a pre-nuptial agreement, they must realise that, as the Judge Moor J says, this is a “significant step” and that provided that the pre-nuptial agreement is entered into freely by both parties and the circumstances cannot be regarded as unfair, it will ultimately be given its intended effect by the Court.

To help ensure certainty and minimise the risk of a subsequent dispute, please contact Helen Warren for advice on entering into a pre-nuptial or pre-civil partnership agreement.

The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.

Helen Warren

Associate Solicitor

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