With over 1 in 3 marriages now ending in a divorce, more and more couples are thinking of entering into a pre-nuptial agreement than ever before. These agreements are usually associated with America or Europe but are becoming more common in the UK too. Now...
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Pre-nuptial agreements may not always lead to fair outcomes but they are generally valid if entered into freely. In one ‘big money’ divorce case exactly on point, the High Court had no power to award a wife half of a marital fortune approaching £11 million even though she had made an equal contribution to its accumulation.
The Scandinavian couple had been married for six years and had two children. He had earned very substantial sums as a professional sportsman and, despite having retired, still enjoyed an income of about £350,000 a year. The marital assets were valued at over £10.8 million, principally made up of equity of about £1.8 million in the former matrimonial home and bank accounts and shares worth £9 million. However, apart from her half share in the home in England that she still occupied with the children, the wife had no resources at all in her own name.
Prior to their marriage, the couple had signed a series of three pre-nuptial agreements, the effect of which was that, on divorce, each of them would retain his and her respective separate property. That meant that the wife was not entitled to claim any capital payment from the husband. The agreements also provided that a court in Stockholm would have exclusive jurisdiction to resolve any disputes arising.
The Court described the husband’s attitude to his children and former wife as mean-spirited. Given the length of the marriage, and the wife’s equal contribution to the generation of the family wealth, it was clearly unfair that she should be left with almost nothing. In finding the agreements valid, however, the Court rejected arguments that the wife’s signatures had been procured by the husband by misrepresentation or the application of undue pressure.
In the circumstances, the Court’s jurisdiction was tightly constrained and it was obliged to deal with the case on the basis of the needs of the wife and children, rather than the sharing principle that would otherwise have applied. The Court could not rule on the wife’s lump sum and maintenance claims until after the court in Stockholm had resolved such issues or declined to do so.
The Court directed the sale of the family home, to which the wife was deeply attached, and the equal division of the proceeds. The husband was ordered to make a sum of £2 million available to re-house the wife and children until a year after the latter ceased full-time education. He was also required to pay a carer’s allowance to the wife and periodical payments to the children, totalling £95,000 a year. Noting that the husband has money to spare, the Court urged him to consider settling the dispute in order to bring an end to the family’s agony.