How Much Weight Should be Given to Pre- and Post-Nuptial Agreements?

In many big money divorce cases, disputes concerning the validity and enforceability of pre- and post-nuptial agreements take centre stage. However, as a Family Court ruling showed, such agreements do not displace the judicial obligation to achieve a fair division of assets that meets the reasonable needs of both spouses.

The case concerned a middle-aged couple who, throughout their 15-year marriage, based their affluent lifestyle on the largesse of the husband’s immensely wealthy father. By the time of their separation, the husband had only a modest earned income and the wife had no meaningful earning capacity. Their assets, almost all of them derived from the father, were worth about £12.47 million.

In determining how those assets should be divided, the Court rejected arguments that the wife had been placed under undue pressure to sign a pre-nuptial agreement which, amongst other things, expressly stated that she would have no claim against the husband’s dynastic wealth. However, it gave limited weight to the agreement on the basis that its provisions had been largely overtaken by events.

The wife had also not been placed under undue pressure to enter into a post-nuptial agreement shortly before the end of the marriage. That agreement, which purported to limit her claim to about £7.1 million, was not strictly binding on her in that she had not signed it. However, the Court found that an accord had undoubtedly been reached and that the document should not be entirely ignored.

The husband received substantial financial gifts from his father during the marriage but, due to a serious breakdown in their relationship, the latter’s munificence had ceased. The Court found that the gifts were unlikely to resume in the foreseeable future. The wife, however, asserted that the husband’s inheritance prospects exceeded £100 million.

Despite the bad blood between them, the Court doubted that the father would wish to render the husband destitute. In the absence of a complete family meltdown, the husband was likely to receive a significant inheritance in due course. Such an inheritance would, however, be entirely non-matrimonial and would be received long after the couple’s separation. Both pre- and post-nuptial agreements clearly stated that the wife would have no claim against the husband’s inheritance.

Although the agreements were the subject of much of the argument in the case, the Court noted that its primary focus was on the wife’s reasonable needs. It found that such needs would be met by her exiting the marriage with assets worth a total of £7.45 million, or roughly 60 per cent of the available assets. The husband would, in addition, have a very high level of financial commitment to the couple’s school-age children.