Don’t sign a Pre or Post Nup unless you are sure! Or, sign up quickly and repent at leisure!
A recent case underlines the importance of not signing a pre-nuptial or post-nuptial agreement unless you are sure that you wish to be bound by its terms.
Many people believe that pre-nuptial or post-nuptial agreements (PNAs) in England are not binding however there has been movement over recent years for the courts in determining financial issues between divorcing couples to hold the couple bound by PNAs subject to certain safeguards. Chief of which are a full and frank financial disclosure at the time the agreement is signed, independent good quality legal advice, lack of duress or improper pressure.
Most of us have heard of pre-nuptial agreements. Post-nuptial agreements are less common. Post-nuptial agreements are often signed when a marriage is in difficulty and when the parties may be under particular pressure to sign. It has, however, been established for some years now that post-nuptial agreements are just as binding as pre-nuptial agreements
In the recent case of Hopkins v Hopkins  EWHC812 (FAM) the High Court Nicholas Cusworth QC (sitting as a deputy) upheld a post-nuptial agreement.
The husband and wife in this case were respectively 66 and 62. They had known each other since the husband was around 28 and the wife 25. Although they were both otherwise married and with young children they commenced an affair. During the initial relationship the parties never lived together but had a son who was born in September 1981.
While she was pregnant the husband acquired a run-down property for her and the children to reside in. The wife also made a contribution to this. In 1982 or 1983 the relationship broke down and the husband remained with his then wife. In 1986 the Mrs Hopkins married a second time that marriage lasted for 13 years and produced one further child.
At some stage around 1989 the Brook Street property was transferred to the wife and her second husband. At the time the wife paid Â£15,000 for it which was an under value of some Â£50,000 and that the gift was made in full and final settlement of any claim that she or her son might have against Mr Hopkins.
In 2000 the wife made contact with the husband to ask for financial help to fund their sonâ€™s education. At the end of that year the Hopkinsâ€™ went on holiday together and the husband separated from his wife. From November 2003 the parties moved into the husbandâ€™s former family home in Somerset.
Unfortunately the relationship was troubled and in 2006 the wife sought some advice from an experienced matrimonial lawyer. Notwithstanding these difficulties the parties married in April 2009.She sought advice again from the same lawyer in 2010 and received a 21 page letter covering her entitlement on divorce. The parties tried counselling but the sessions were not successful. The wife then consulted a different highly experienced solicitor in the West Country. The husband consulted Payne Hicks Beach (PHB).
There were extensive negotiations under the terms of the post-nuptial agreement. At that time it was believed that the husband had assets exceeding Â£30 million. After counselling and further negotiations PHB wrote to Wâ€™s solicitors on the 6 April 2011 setting out the terms upon which, they said, the Hopkins had agreed. At this stage it appeared the Hopkins were still hopeful of saving their marriage. Under the terms of the agreement the wife was to receive two properties, a car and a lump sum of Â£350,000 the latter being payable only in the event of a subsequent divorce. The agreement was forwarded to the wife by her solicitor on the 8 April and the wife agreed to it within just over one hour. On the 5 May the Hopkins agreed to vary the agreement so that the lump sum was replaced by a pension share. The parties still continued to try and save their marriage.
At the end of June PHB sent through an updated version of the PNA with their clientâ€™s financial disclosure attached. The wife consulted her solicitor who made it clear that if she signed the agreement it would be against his advice and he would require her to sign a disclaimer.
The solicitor insisted that the agreement be amended so that it was made clear he was not satisfied with its terms. He stated â€œIf you sign the agreement then it will be water tightâ€. This advice was confirmed by a specialist family law barrister.
Divorce proceedings were commenced and financial remedy proceedings. Mrs Hopkins sought a further Â£2,000,000 in addition to the provision made under the post-nuptial agreement. However the husband offered her just Â£200,000. When the parties first consulted their solicitors there had been a recent judgment of the Supreme Court (the highest court in England) i.e. the case of Radmacher (formerly Granatino) v Granatino 2010 UKSC42.
This case remains the most important one for those considering the impact of a nuptial agreement on the financial remedy process in divorce.
The Supreme Court in Radmacher said a nuptial agreementâ€¦ is to carry full weight both the husband and wife must enter into it of their own free will, without undue influence or pressure, and informed of its implications. In the Radmacher case the husband was bound largely to a pre-nuptial agreement that provided for him to receive no financial provision on divorce, even though his wife had assets of Â£100 million. The court also said that an agreement would be upheld if it was not unfair.
Returning to the Hopkins case the wife’s contention that she had not read her first solicitor’s 21 page letter of advice until 21 months later and that that she had not read the barrister’s advice was not accepted by the court. She had signed a disclaimer which the court found she had understood. Nor was it accepted that the wife was subjected to any improper pressure by the husband. The court held the wife bound by the post nuptial agreement. She exited the marriage with around £620,000 and a pension share. The husband had assets estimated at between £54 and £35million.
In the absence of real evidence of duress or a vulnerability clearly evidenced e.g., by psychiatric report as in the case of NA v MA 2006 EWHC 2900 it is clear going forwards that he courts are going to increasingly uphold nuptial agreements of all kinds.