The Validity of a Pre-Nuptial Agreement Often Depends on Top-Quality Legal Advice

Pre-nuptial agreements (PNAs) which are not entered into freely or which have unfair results will generally not be worth the paper they are written on. However, as a High Court case showed, judges are far more likely to treat them as valid if they are signed after taking independent legal advice.

The case concerned a PNA executed by a couple about three months before they married. The husband, an extremely successful financier, had a net worth of about £32.5 million at the time and had continued to prosper mightily since. The wife had not much more than £60,000 in assets. Their marriage lasted about 14 years, yielding two children, before the wife petitioned for divorce.

In accordance with the terms of the PNA, the husband offered the wife £11.75 million with a view to achieving a clean break. That represented a housing fund of £4.75 million and income-producing capital of £7 million. In contending for more extensive provision, however, the wife boldly argued that the PNA should be wholly ignored.

Ruling on the matter, the Court noted that, prior to signing the PNA, the couple had each received independent legal advice from highly regarded family solicitors. The equal sharing principle was not ignored and the PNA, which also made very generous provision for child maintenance, would have been torn up had the marriage lasted 25 years.

The Court acknowledged that the couple had had what was described as ‘the mother of all arguments’ prior to signing the PNA. However, it was a two-way argument and they had time to cool off prior to signing the document. The husband had made it plain that there would be no marriage without a PNA, but that was commonplace. Overall, the Court was not satisfied that the wife had been placed under undue pressure to enter into the PNA.

In reaching the very clear conclusion that the PNA could not be ignored, the Court found that a fair deal had been struck. It certainly did not represent a capitulation by the wife. The ruling meant that the wife and children would be provided for in accordance with the husband’s offer.

Giving guidance for the future, the Court noted that litigants should be aware that it is a significant step to instruct lawyers to prepare a PNA. Such agreements are intended to bring certainty and minimise the risk of subsequent dispute. In the absence of something fundamental that undermines their validity, judges are highly likely to give them full effect.