Pre-Nups - Definitely Maybe?
Family Law Solicitors Nick Robertshaw reflects on a well prepared pre-nuptial agreement.
Celebrity divorces are not often out of the news, but two recent cases caught my eye, not only because of who was involved, but also because they seemed to highlight different attitudes on opposite sides of the Atlantic.
I love the TV show The Big Bang Theory and so was disappointed to hear that Penny was getting divorced. My first thought was ‘Poor Leonard!’ However, thankfully, actress Kaley Cuoco is divorcing from her professional tennis player husband, Ryan Sweeting, rather than from her on screen husband, science geek Leonard.
Apparently The Big Bang Theory star, who is reportedly earning $1m per episode, had a pre-nuptial agreement (a ’pre-nup’) drawn up before she married Ryan in 2013.
I am also a huge Oasis fan, so it was interesting to see Liam Gallagher’s divorce from Nicole Appleton recently in the news. It would appear that here there was no pre-nup to protect Liam’s estimated £35m fortune and therefore he is embroiled in expensive litigation to determine who should get what in the divorce.
It may not be down to the pre-nup, but Cuoco has been pictured since separation looking happy and enjoying her beloved horse riding. Pictures of Gallagher on the other hand have been of him on his way to Court with his lawyer…
One reason why pre-nups may seem more popular in the US is that they have long been recognised in all States. They are seen as a normal part of the marriage process, rather than just for celebrities.
The situation is quite different in England and Wales where pre-nups were not properly recognised until the widely publicised 2010 Supreme Court decision in Radmacher v Granatino. Therefore they are not only new to the general public, but also to the judiciary.
The court in the Radmacher case made clear that such agreements were no longer against public policy and should be upheld provided:
- They are freely entered into;
- Each party fully understands the implications of the agreement;
- It would be fair to hold the parties to the agreement.
Proper provision must always be made for children and if this is not done any agreement may unravel.
The Law Commission have also recently come out in favour of pre-nups saying that provided the above safeguards are in place they allow couples "autonomy and control, and make the financial outcome of separation more predictable".
Why get a Pre-Nup?
Should you arrange for a pre-nup to be prepared? While couples generally accept that making a Will is a good idea to provide for their loved ones on death, making arrangements to split finances on divorce while planning for their big wedding day is certainly not for everyone.
A properly drafted and valid pre-nup will set out that certain assets and income, including inheritances and pensions, are to be ‘ring-fenced’. Those involved in a business for example can specify that it will be protected on divorce, meaning that long-term planning and investment in the business can take place. Issuing proceedings through the courts can be unpredictable and expensive, and while the parties to a pre-nup cannot override the court's broad discretion to decide how to redistribute their assets and income when considering an application for a financial order, the court must give appropriate weight to a pre-nup as a relevant circumstance of the case. It may be that a pre-nup should be given decisive weight. This will depend on the particular facts of the case.
While pre-nups may be the preferred option for celebrities and the super-rich, they are not the only people who could benefit from such financial planning. Anyone who wants certainty and protection may find them useful. Of course, professional legal advice should be sought by both parties from the outset to make sure that any such agreement is validly entered into and will ultimately be binding on them.
‘Some Might Say’ that Liam Gallagher may have been an old romantic not to have had a pre-nup, but ‘Definitely Maybe’ a pre-nup should have been part of his ‘Masterplan’ as he may now see a sizeable portion of his fortune ‘Slide Away’.