The Family Court of England and Wales is not bound by a pre-nuptial agreement when deciding how marital assets should be divided in financial proceedings. A pre-nuptial agreement is a legal agreement made between two individuals before their marriage has taken place. The agreement usually sets out how the couple wish their assets to be divided between them if they later separate or divorce.
The recent case of KA v MA (Pre-nuptial Agreement Needs) highlights that the over-arching criterion in assessing housing and income needs in financial proceedings is fairness, even though the couple signed a pre-nuptial agreement that would limit the wife’s claims. In this case both parties had met in 2000 and had been previously married. The husband had substantial wealth compared to the wife. The wife moved into the husband’s property in 2004 when their child was born and the wife became a full time carer for the child.
Prior to their marriage in 2008, the husband wanted the wife to sign a pre-nuptial agreement so he could protect his pre-acquired wealth to pass to his sons from his first marriage. He disclosed that his business assets were £30 million, and the family home and other assets were valued at £3.8 million. In comparison the wife had two properties that had a net value of £216,000.
The pre-nuptial agreement provided the wife with £24,000 annual maintenance and a lump sum of £600,000 if the parties were divorced. Both these sums were index linked to take account of inflation. However, she sought legal advice on the pre-nuptial agreement and was advised not to sign the agreement. The wife reluctantly signed the pre-nuptial agreement three weeks before the wedding as she knew her husband would not marry her without her signing the agreement.
The relationship broke down and financial proceedings were issued in 2016. The wife sought capital of £6 million on a clean break principle. The husband offered £1.6 million and did not seek to implement the pre-nuptial agreement fully.
This case came before Mrs Justice Roberts in the High Court, who found that the wife had understood the pre-nuptial agreement and was aware that it might be enforced. From the legal advice that she had received at the time of signing the document she was aware that the agreement fell short of what she may have achieved under a court order. The judge also found that the wife had intended to bound by the agreement and was aware that if she did not sign it then the parties would not get married. It is interesting to note that the Court appeared to take into account that the timings were relevant and placed pressure on the wife to sign the agreement.
Mrs Justice Roberts decided that she could not disregard the Pre-nuptial agreement, however on a needs basis she ordered that the husband pay £2.73 million as a clean break to provide a housing fund of £1.35 million. The wife was also awarded a Duxbury Fund of £1.6 million (a lump sum intended to provide an income for a certain number of years). To reach her decision, Mrs Justice Roberts applied the over-arching criterion of fairness in assessing the wife’s housing and income needs and taking into account the wife’s agreement to limit her financial claims by signing the pre-nuptial agreement. This case is a reminder that a pre-nuptial agreement is one element of the court’s discretionary search for a fair outcome.
Case: KA v MA (Prenuptial Agreement: Needs)  EWHC 499 (Fam)
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