By Callum Townend, Trainee Solicitor
Prince Harry and Meghan Markle are set to tie the knot in May 2018 and considering the couple’s vast wealth, they may consider entering into a pre-nuptial agreement (“a prenup”) to protect their respective interests.
Given that the couple intend to reside in England, if they were still habitually resident there at the point of any separation in the future, the divorce would be governed by the law of England and Wales. The default position would be that the value all of their assets, including those acquired before marriage, would potentially be taken into account. Their matrimonial assets would be split in a way in which the courts deemed to be fair. Any inheritance and wealth acquired before the marriage could potentially be considered and so Prince Harry’s reported £30million and Meghan’s reported £4million should ideally be protected. A prenup may, therefore, be useful to provide certainty regarding the split of assets on divorce.
Historically, prenups were not seen to be legally binding in England and Wales. The Supreme Court’s decision in the case of Radmacher v Granatino shifted the attitude of the courts towards giving significant weight to these types of agreement and there are moves to try and make them binding on courts. At present though, there will be one factor for the judge to weigh up but not necessarily the determining factor especially if there are children, financial dependence, loss of career as a result of family and if the marriage has been a long one. Also, in determining the fairness of the agreement, the courts in England will consider whether the parties had the opportunity to take independent legal advice and if there was full disclosure of all the parties’ assets prior to them signing the agreement. Agreements can also be set aside if there is any evidence that the agreement was entered into under duress, fraud or misrepresentation. At present, they cannot completely oust the jurisdiction of the family courts in England.
The courts in England and Wales, therefore, have a high degree of discretion relative to prenups and even if Prince Harry and Meghan were to enter into one, it is not guaranteed that the court would uphold the terms of the agreement.
Position in Scotland
If Prince Harry and Meghan were ever to decide to move north of the border, and then separate, then the position relative to divorce law and to prenups would differ markedly from that of England and Wales. In Scotland, it is widely accepted that prenups will be upheld provided that they were fair and reasonable at the time they were entered into. Importantly in Scotland, assets acquired before the marriage as well as gifts and inheritances do not form part of matrimonial property to be divided between the couple on divorce. The assets built up already by Prince Harry and Meghan would, therefore, not be taken into account. However, there is one proviso to that which would render a prenuptial agreement invaluable in Scotland. If either of the parties converted their existing assets by selling them and acquiring new assets in their place during the marriage, then these newly acquired assets would form part of their matrimonial property. It is highly likely that a couple broadly of the ages of Prince Harry and Meghan will buy and sell their property, reinvest their money and generally change their assets around quite a bit.
A prenuptial agreement could, therefore, be a valuable insurance policy for Prince Harry and Meghan considering the substantial wealth they have already accumulated.
Prenups can be perceived as being a difficult topic for discussion, however, they can provide predictability and protection in circumstances where a relationship has broken down. Contrary to the myth that prenups are only used by wealthy individuals, such as Prince Harry and Meghan, they are in fact regularly used by individuals of more modest means, particularly those couples who choose to marry later in life or for a second time and who have already accumulated property and assets beforehand.
If you are looking for advice on prenuptial agreements, please get in touch with the Family Law team at Turcan Connell.