Pre-nup not binding, rules court

Court rules that wealthy couple's pre-nuptial agreement is not binding


  • Pre-nup ruled unenforceable by English court
  • Wife awarded £8m despite pre-nup agreeing to £850k
  • UK government poised to legislate on pre- and -post nup agreements

Pre-nup not binding, rules courtWhen the marriage of a wealthy Scandinavian couple broke up, the English court had to consider the effect of a pre-nuptial agreement ('pre-nup') which they had entered into in their homeland.

Their considerable wealth was the result of the husband being the beneficiary of trusts established in Jersey valued at £76 million.

The couple lived together in London prior to getting married in their native Scandinavia. They have two children who both go to school in London. When the marriage broke up after four years, the wife decided to remain in the UK.

Unenforceable Agreement 

The pre-nup provided that, in the event of a breakdown of the marriage, the husband's inherited wealth should be protected and the wife should receive approximately £850,000. However, the agreement would have been unenforceable in the country in which it was written because local law prohibits a prearranged distribution of assets. The wife also alleged that she was not fully aware of the implications of the pre-nup.

The wife brought proceedings for financial support in the English court. The court ruled that, based on the particular facts of the case, the husband's inherited wealth could be used to provide her with a settlement based on her 'reasonable needs'.

She was awarded nearly £8 million, which includes provision for the education and maintenance of the couple's children until the youngest child has completed secondary education.

Independent Professional Advice

The outcome in cases such as this will depend on the individual circumstances. However, a pre-nuptial agreement will generally be supported by the courts if it can be shown that both sides entered into it freely without undue pressure being applied, that they fully understood its implications and that they each had the benefit of independent professional advice at the time the pre-nup was executed. Otherwise, a successful challenge is a real possibility.

The Government is in the early stages of creating legislation designed to give pre-nuptial and post-nuptial agreements legal force and also to give legal rights to cohabitants on break-up of relationships.

Considering a Pre-Nuptial Agreement?

Contact Paul Wild for advice on all family and wealth preservation matters.

 

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