When is a pre-nup not a pre-nup? When your husband tells you it’s “Just a piece of paper”, according to a multi-million divorce case in the High Court. LGFL’s Director and pre-relationship planning expert Rita Gupta explains more.
“I hold in my hand a piece of paper”
The wife of a millionaire is claiming her husband tricked her into signing a pre-nuptial agreement (or pre-nup) as the couple enjoyed a romantic weekend on the Canadian side of Niagara Falls, before their wedding.
The couple are Swedish and had lived together for six years before marrying in the year 2000. Their marriage broke down in 2014, with legal proceedings started in both Sweden and the UK in 2015. The couple have two children.
Disagreement over a pre-nup agreement
The wife wishes the Niagara pre-nuptial agreement, and two similar others, to be discounted. The husband wants the Niagara agreement to stand.
- If the pre-nup is considered binding, the wife will receive half the value of the couple’s Berkshire home, giving her around £500,00.
- If the pre-nup is not considered binding, she will lay claim to half the husband’s current fortune of £11million.
The husband claims that his wife was always aware of his requirement for a pre-nup, and that he would not consider marriage without one. In his ruling, judge Mr Justice Francis explained that:
"She says that he told her that 'it wasn't about me or us it was about his businesses', and that he told her repeatedly that it was 'just a piece of paper' and that it would not make any difference to her.”
Are you considering getting a pre-nup? Call LGFL to discuss your situation in a free 30-minute consultation in our discreet countryside offices.
Pre-nups in Sweden and the UK
Whether the pre-nup has any legal standing depends on where the divorce case is heard.
In Sweden, any agreements made before marriage are viewed as contracts, and are generally enforced by the courts. (Mr Justice Francis said a judge in Stockholm Sweden should have the opportunity to rule on the woman's claims for a lump sum of money and ongoing maintenance.)
Pre-nups are not legally binding in the UK, but that doesn’t mean they are not valuable (see below).
Pre-nuptial agreements in Ontario Canada
In Niagara-on-the-Lake in Ontario Canada, where the couple holidayed, a pre-nup is referred to as a domestic contract or marriage contract. Under section 52 of the Family Law Act, these legally-binding contracts can cover division of assets such as property and support, but not custody rights or spousal access to children. A pre-marriage contract can be set aside if it was not completed with full and frank financial disclosure.
Pre-nups in the USA
Had the couple chosen to divorce across the border in the US, the situation would be more complicated! New York is one of the few US states that has not adopted the Uniform Prenuptial Agreement Act (UPAA). This means that it sets its own rules and requirements for pre-nups.
In New York State (where the City of Niagara is located), pre-nuptial agreements (a.k.a. antenuptial agreements) are considered a binding contract as soon as a couple marries. They must be in writing and be signed by both spouses before a notary public. According to DivorceNet.com
, a NY state pre-nup will usually be valid unless:
- One person signed the agreement under duress
- The agreement was unconscionable (severely unfair) when it was signed
Under US law, if the document was signed in a hotel, and not before a notary public, the pre-nup would be invalid if the divorce case was heard in the state, even without the clauses above.
Should I insist on a pre-nup?
In the UK, a pre-nup is not legally binding, but it is still a very good form of protection for couples who bring valuable assets to the marriage such as property, inheritance, business wealth, etc, or for second marriages or unions. The act of drawing up a pre-nuptial agreement allows couples to look at their finances in details, and address other issues such as tax liabilities, etc.
By drawing up a mutually agreeable pre-nup, you and your spouse-to-be effectively define what each brings to the marriage, and how it will be divided should you split up. Obviously, your situation will change over time, and if you do split up years later, your finances may not be the same. If nothing else, the pre-nup acts to define your financial status at the time of marriage, which can help in negotiating a fair and reasonable settlement for you and any future children.
Will a pre-nup sour our relationship?
Not at all, so long as you approach it sensitively! Pre-nups should always be created together with mutual agreement and consent. Full and frank disclosure of all finances should be made, and this can be quite liberating for couples who can then look forward to the future with full knowledge of their financial position.
And while we don’t suggest that a pre-nup is the ideal Valentine’s Day present, offering your spouse-to-be the reassurance that whatever happens, you’ll look after them to a defined level is certainly much longer-lasting than roses or chocolates…