The impending divorce of Amazon boss Jeff Bezos has once again shone a spotlight on prenuptial agreements. Some reports suggest the world’s richest man and his estranged wife MacKenzie Bezos did not have one in place. Given the vast amount of money and assets at stake in this divorce, the lack of a prenup may complicate and lengthen proceedings.

Prenups are certainly not the answer to everything. Particularly in a case as complex as the Bezos split. But these agreements, recognised in every US state, do often simplify division of assets following divorce.

ARE PRENUPS ENFORCEABLE?

What about the UK? We’ve written about the legality of prenups in this country before and the law is developing all the time. Generally speaking if the agreement is ‘fair’ courts will rely on it. But it’s the definition of ‘fair’ that could add an element of uncertainty to any prenuptial agreement you sign. For example:

  • Did each party receive independent legal advice?
  • Was there full disclosure of each side’s financial position?
  • When was the agreement signed? Ideally any prenup should be executed at least two months ahead of marriage to avoid any suggestion that undue pressure was applied to the financially weaker spouse.

Because a prenup involves altering the rights you may have under the general law it’s essential to seek advice from an experienced family solicitor before entering any agreement.

INTERNATIONAL DIVORCE AND PRENUPS

At Brookman in London we advise regularly on international divorce. Often there will be a prenup in place. Enforceability can become a matter of contention. Questions that may arise include:

  • Can UK courts enforce a prenup signed abroad?
  • Are foreign assets covered by the prenup?

Everything depends on what the original agreement says about jurisdiction and the law that governs the agreement. The recent case of DB v PB (2016) showed that the courts in England and Wales will uphold jurisdiction clauses even where it might be unfair to the financially weaker spouse to do so.

The case involved a Swedish couple that had signed three prenuptial agreements. Each agreement provided that it should be interpreted according to the law of Sweden and that any maintenance claims should be heard by Swedish courts. The wife issued proceedings in England but the judge found that because of the prenup, his hands were tied. While he could order the sale of the family home, that was all he could do. Even though he was ‘completely satisfied’ that the wife’s needs would not be met by the sale of the home alone. Any other order would mean straying into the area of maintenance and the needs of the wife and children – which the prenup did not allow. He was obliged to respect the parties’ autonomy.

CAN I CHANGE A PRENUP?

As we have seen above the overriding concern of the courts when looking at a prenup governed by English law is to decide whether it’s fair or not. As the length of a marriage increases, circumstances change. Marital wealth may increase or diminish significantly (Jeff Bezos hadn’t even started Amazon when he married). There may be children. What was fair on the day you married may not be fair a few years down the line.

Courts will always bear in mind the parties’ freedom to enter a prenup. But when a long marriage ends, the greater the onus will be on the person seeking to rely on a prenup to establish that it remains fair.

For this reason we recommend you review your prenup every four or five years or when a significant life event occurs. This will involve a deed of variation or a postnuptial agreement.

HOW DO I DISCUSS A PRENUP WITH MY PARTNER?

In our experience some people can feel awkward about bringing up the idea of a prenuptial agreement with their partner. They are uncomfortable discussing what might happen to finances and property if the marriage fails. And this is understandable. But it helps if:

  • You raise the idea of a prenup as early as possible
  • You point out that it will be designed to protect the financially weaker party
  • It can make any divorce less complicated and less expensive
  • You suggest preparing the initial agreement together

There’s no getting round the fact that a discussion about prenups can be delicate. But at Brookman it’s our job to sensitively guide you through the process. Remember, we will be working with your partner’s own legal adviser. It’s typically a requirement that both of you receive independent advice. In our experience this arms length negotiation helps remove some of the emotion from the situation.

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