Prenuptial agreements may have been tarnished by association with lurid cases involving the rich, glamorous and non-too-admirable but the UK divorce rate, the increasingly complex families created by second or subsequent marriages and the rising asset base of UK home owners means they are becoming more and more sought after.
So why does it make sense to consider a prenup, even though they are yet to be fully recognised in British law?
When German heiress Katrin Radmacher won a 2010 supreme court ruling in the UK in a well-publicised case featuring a prenup agreement she had made with her French-born husband, Nicolas Granatino, it seemed the British legal system was on the verge of endorsing this thoroughly modern version of a marriage contract. With the not inconsiderable sum of £106million at stake, the Guardian reported the judge’s decision as giving prenuptial agreements new force in English Law and possibly sparking a rise by wealthy individuals to draw up prenups to protect their accumulated wealth.
Since then the Law lords may have taken a more equivocal stance but the public has voted with its pens. In 2014 the Law Commission published a report entitled ‘Matrimonial Property, Needs and Agreements’ which recommended legislative reform to make “qualifying nuptial agreements legally binding”. Not-so-fast forward to 2018 and the government has yet to issue a clear and final response. Yet a survey published in early 2018 said that two-thirds of family lawyers in the UK had seen a rise in the number of such agreements since 2010 and in the USA 63% of divorce attorneys say they have seen an increase in prenuptial agreements over the last three years. From Britney Spears and Kevin Federline to Kim Kardashian and Kanye West it seems that in the home of the brave and the land of the free everyone who is anyone wants a prenup.
In the UK, 42% of all marriages now end in divorce (Divorce and Marriage statistics, Ashfords 2017) and, according to the Marriage Foundation data one in three second marriages fail. Where once traditionalists might have worried over ‘young love’ going wrong, the Office for National Statistics yields the information that the average age at marriage has risen to 34.6 years for women and 37 years for men. Whatever is at the heart of this trend, it’s not youth and impetuosity.
What’s happened in society is that the more frequent breakup of marriages and the relatively high incidence of re-marriage, combined with the much greater asset value of most homeowners, put simply means that there is more to share out when relationships fail and invariably more claims upon the spoils from the offspring of more parents.
So it’s not at all unromantic or unreasonable for couples to seek advice – and agreement – on who gets what in the event of a relationship breakdown.
They can remove uncertainty from people’s futures, simplifying matters should relationships break down and protect vulnerable family members from lengthy, upsetting disputes.
Prenuptials, then, may not be the most romantic of concepts but as anyone who has been through a divorce will say, avoiding that process is the better option. The evidence points to the prenup, or at least the discussion about the prenup, as being a very effective balancing mechanism for the realities of marriage as opposed to the romance.
For those who really do want to marry, the prenup is a great enabler. Both parties can be encouraged to sit around the table and a good solicitor can engage with either (although not both!) to explain and examine the complexities included. Many parents, or grandparents, for example, need to know how a second marriage will affect the inheritance of assets they had always assumed would be passed on as a matter of course. Another growing phenomenon is what has been referred to as a ‘silver splicer’, that’s to say people over the age of 60 who in reality are having to consider not just what might happen in the event of a marriage breakdown, but something decidedly more terminal. The great American journalist and novelist Ernest Hemingway, himself a man who had four marriages, insisted that people ‘do not grow wise, they grow careful’.
And what of the cost? With the rise in what may be colloquially called ‘divorceable assets,’ the relative cost of arranging a prenuptial agreement against the costs involved in going through divorce proceedings and the likely value of assets in dispute make the prenup look both good sense and good value. Costs of divorce proceeding all the way to a final hearing in court could be in excess of £20k for each party. Even avoiding court through an arbitration process may well top the £10k - £12k mark, again for each party.
Whether or not they are to be enshrined in law, it looks highly unlikely that the factors which motivate people to sign prenuptial agreements are going to change. People live longer, many re-marry and everyone exists in a society where perfectly reasonable material concerns go hand in hand with the state of matrimony. Second time around, especially for those with unhappy experiences of a break-up it’s easy to see the prenup as a sensible piece of planning along with more common examples of forward thinking such as wills and life insurance.
At Neves, we frequently draft nuptial agreements for our clients and advise on the effect of such agreements when a marriage fails. If you are thinking of marrying why not have a chat with a member of our family team who can advise you as to whether such an agreement will be right for you. Call 0330 0945 500 email email@example.com or complete our Contact Form and we'll get back to you.