Latest news with #prenuptial
Times
05-07-2025
- Business
- Times
‘My husband is much richer than me but I still wanted a prenup'
In the run-up to Elaine Foster's wedding in 2019, she had the typical to-do list of a bride-to-be: sort out the flowers, pick a caterer — and bring up the subject of a prenuptial agreement with her fiancé. Foster, 56, was determined to sign the legal contract known as a prenup before walking down the aisle. In fact, she said she wouldn't get married without one. 'It was nothing to do with protecting my wealth. My husband is substantially better off than me. I wanted to go into the marriage with us knowing that we were doing it for love, not financial gain,' said Foster, a lawyer at the Milton Keynes firm MacIntyre Law. 'I also wanted to ensure our families didn't worry that they would lose out financially later in life if we separated. I didn't want his children, or mine, from previous relationships to fear that they would lose what their parents had worked for.' Foster and her husband were ahead of their time. Prenuptial agreements are common in the United States, but were fairly rare in the UK, except among the ultra-wealthy. Now, though, lawyers say they are becoming more popular. The number of divorces has fallen dramatically over the past 20 years, but the number of prenups has risen. Edwards Family Law, which specialises in divorce, said that there had been a 50 per cent surge in the number of prenups it dealt with last year, compared with 2023. They are particularly relevant in second marriages where you are more likely to have built up wealth before you met. Without a prenup specifying otherwise, assets are often divided equally according to the 'sharing principle' unless there is good reason to do otherwise. However, a Supreme Court ruling on Tuesday (July 2) has suggested that this principle should not be applied to all assets accrued before the marriage. The Supreme Court ruled in favour of Clive Standish, 72, who had transferred almost £78 million of assets to his ex-wife, Anna, 57, while they were married for tax planning purposes. • Retired banker wins fight to keep majority of £80m 'gift' to wife The assets had been accrued before his marriage and, during a lengthy divorce battle, he argued that they should not be considered as matrimonial assets, even though they had been held in her name while they were together — and the courts, eventually, agreed. Vandana Chitroda from the law firm Broadfield said: 'It is likely that following this judgment, couples entering into pre and postnuptial agreements will be advised to ensure that non-matrimonial property is concisely defined.' Charlotte Lanning from Edwards Family Law said that the growing use of prenups was probably a result of people getting married later. 'The average age at marriage is higher, so you may have already bought a house or set up a business. When everyone was getting married in their early twenties, they had not had a chance to build up any wealth yet. 'The prevalence of second marriages plays a part too. If you've had a messy divorce and lost half your assets, you want to preserve what you have left.' Prenups are not legally binding in the UK, but an important Supreme Court decision in 2010 gave them more clout. A judge ruled that courts should take such agreements into account, provided that they were entered into freely by both parties; that there was 'full and frank' disclosure of their assets; that each party had independent legal advice and the agreement was not unfair. They typically outline how you would divide your assets in the event of a divorce and are often used to protect inherited money, business ownership or inheritance for children. At the time of divorce, a court will consider the prenup in the context that it was made and the effect it would have on the couple if it were enforced. 'If the agreement only provided you with £100,000 but you had been living in a £2 million house, the court is unlikely to think that was fair,' Lanning said. 'You might have agreed not to take any spousal maintenance, but if you had since been in an accident and were unable to work, then the court would probably rule that you are entitled to some financial support.' In the end, Foster's prenup was relatively straightforward. They agreed that what each had accrued before the marriage would remain their own, and that there would be no ongoing legal ties such as maintenance payments if they were to divorce. Anything they accrued after the marriage would be shared equally if they separated. Foster said that this did not include any inheritances, which would be kept separate from their joint finances. • Read more money advice and tips on investing from our experts Foster said: 'We are very straight down the line and didn't want to muddy the waters. Having been divorced before, we knew that it's always a possibility. It's good to talk about these things from a place of love, rather than bitterness or unfairness. 'The way I see it is, If I go and buy a new car, I'm going to insure that car. That's not because I want to crash it or I'm planning to crash it, but because I want to be protected. It's a similar thing for me here.'
Daily Mail
02-07-2025
- Business
- Daily Mail
Landmark Supreme Court ruling on how assets are split in divorce 'will trigger boom in US-style prenups'
A Supreme Court ruling on how cash earned before a marriage should be divided in a divorce is set to herald a boom in US-style prenuptial agreements, lawyers have said. Today the UK's highest court ruled that a retired banker who gave his wife almost £80million to avoid inheritance tax will not have to split the money with her equally following a divorce. The landmark ruling clarified that money earned by one partner before a marriage does not automatically become 'matrimonialised' - and thus shareable in a divorce - if it is transferred to the other partner. However lawyers said the judgment paves the way for a boom in pre- and post-nups as the ruling states that the intention behind a transfer of cash between partners is crucial in deciding who gets what in a divorce. Five Supreme Court justices ruled today that Clive Standish, 72, is entitled to keep the largest share of almost £80million he had transferred to his ex-wife Anna Standish, 57, because most of the money had been earned prior to the marriage. The former chief financial officer of banking giant UBS had transferred the money to his wife, who is Australian, to take advantage of her non-dom status and avoid paying £32million in inheritance tax following changes to the law. Mr Standish expected his wife to use the money to establish two offshore trusts, but she never did and so remained the sole owner when divorce proceedings began. In 2022 the High Court decided that Mrs Standish should receive £45million of the family's £132million total wealth. But this was later overturned by the Court of Appeal which reduced Mrs Standish's share to £25million. Today the Supreme Court upheld the Court of Appeal's decision with a ruling that will affect how wealthy people plan their finances and estates - particularly following Chancellor Rachel Reeves' inheritance tax changes. Lord Burrows and Lord Stephens said in their ruling: 'In short, there was no matrimonialisation of the 2017 assets because, first, the transfer was to save tax, and, secondly, it was for the benefit of the children, not the wife. 'The 2017 assets were not, therefore, being treated by the husband and wife for any period of time as an asset that was shared between them.' Lawyers said the ruling will spark an increase in couples signing US-style pre- and post-nuptial agreements in order to avoid similar lengthy and costly legal battles. Pre-nups - a contract which state how assets are divided in the event of a divorce - are not legally recognised in England and Wales but are common in the United States and Europe. But such agreements are generally respected by the courts following a 2010 Supreme Court ruling, although it is currently left to the discretion of judges. In December the Law Commission, the independent body which recommends legal reform to Parliament, proposed formally recognising pre-nups in UK law. The Government has a year to respond in full to the proposals. Claire Reid, a partner at Hall Brown Family Law, said: 'Given the recent changes to the Inheritance Tax rules announced by the Government, there are likely to be many individuals undertaking the kind of estate planning that Mr and Mrs Standish were. 'Wealthier spouses will now be alive to the need to formalise the terms of any transfers of cash or other assets even more clearly to avoid falling into the same complicated situation. 'That will probably mean ensuring that there are very carefully worded pre- and post-nuptial arrangements put in place to protect them from any future claim of the sort made by Mrs Standish.' Stephanie Kyriacou, managing associate in family law team at Freeths lawyers, the case 'adds renewed relevance to pre-nuptial and post nuptial agreements for high-net-worth individuals, particularly where tax planning, inherited wealth or business assets are concerned'. Ms Reid added: 'Even allowing for the fact that properly drafted nuptial agreements are regarded as persuasive by the courts, they still don't have full legal weight, 15 years after another landmark Supreme Court ruling. 'Therefore, this latest judgement will add pressure on ministers to outline what they intend to do regarding the Law Commission's suggestions that legislation governing financial settlements on divorce might be overhauled.' The Supreme Court ruling came on the same day that official figures showed divorce numbers had returned to pre-Covid levels after falling during the pandemic - with this driven largely by women. The Office for National Statistics (ONS) figures showed that 103,816 dissolutions were recorded in England and Wales in 2023 - including 102,678 marriages and 1,138 civil partnerships. The majority of marriages now end through so-called 'no fault' divorces or dissolutions for the first time following a change in the law in 2022 - with 74.2 per cent of divorces 'no fault' in 2023. However despite the introduction of joint divorce applications, the figures show that almost three-quarters of divorce proceedings were still initiated by one party alone. The ONS figures show that women are the driving force behind divorce - whether it be in opposite or same-sex marriages. Women accounted for 50,164 sole applications for divorce in 2024 out of a total of 100,787 - with 29,123 divorce applications made solely by men and 19,743 joint applications made by both partners. The figures also show that same-sex divorces have increased four-fold in the last five years and that last year women made 65 per cent of all applications for divorce in same-sex marriages. Women in same-sex relationships made 839 sole applications for divorce last year and 378 joint applications - compared to 427 sole applications and 247 joint applications for men in same-sex relationships. The figures also show that the average length of a same-sex marriage that ends in divorce is significantly shorter for women in same-sex relationships. The median duration of marriages that ended in divorce was 12.7 years for opposite-sex couples and 7.2 and 6.3 years for male and female same-sex couples respectively, according to the ONS.
Yahoo
27-06-2025
- Business
- Yahoo
How prenups and postnups can benefit married couples – and what to watch out for
Pre and postnuptial agreements have become increasingly popular in recent years as couples seek to protect their assets and ensure financial clarity in the event of a divorce. As a senior associate in the family law team at Knights, I've seen first-hand how this shift has only fuelled misconceptions on the key rules and benefits when using these legal instruments, which heightens the emotions of the parties entering a formal relationship arrangement. Some couples can benefit from having a nuptial agreement but it's vital to know how they work before signing on the dotted line. Here are some of the key questions I commonly receive from clients considering some form of nuptial agreement. A prenuptial agreement is entered into before marriage, setting out how a couple agrees to separate their finances if they later divorce, whereas a postnuptial agreement is entered into after marriage. Prenuptial agreements are often used where one spouse is much wealthier than the other, has an asset they want to protect such as a property or business, or is anticipating coming into wealth during the marriage – such as from an inheritance. The agreements aim to provide for something other than an equal division and pooling of the assets. The premise of a postnuptial agreement remains the same: to regulate how assets will be divided in the event of a divorce. There are two main scenarios where a postnup might come into play. One is when someone who is already married anticipates that they will come into some wealth during the marriage and wants to ensure that this wealth is not shared equally with their partner. Another scenario is when a couple has already entered into a prenuptial agreement, but one or both partners wish to review and change the terms. Prenuptial and postnuptial agreements are living documents that should be kept under regular review – such as after five years or after significant life events or changes in circumstances, like the birth of a child. One common misconception is that these agreements are only for the wealthy. In reality, they can be beneficial for anyone who wants to protect specific assets, ensure financial clarity, and reduce the potential for conflict in the event of a divorce. Another misconception is that these agreements are unromantic or indicate a lack of trust. On the contrary, they can actually provide peace of mind and strengthen a relationship by ensuring both parties are clear about their financial expectations and responsibilities. The courts have ultimate discretion over how assets are divided upon divorce. Pre or postnuptial agreements cannot fully override this discretion and therefore are not legally binding. However, if the agreements follow a proper process – including full financial disclosure, separate legal advice for both parties and a fair and reasonable negotiation – they are likely to be upheld. While these agreements must be fair and transparent, they provide a strong framework for how assets should be divided, and courts typically respect them if they meet these criteria. Yes, pre and postnuptial agreements can include provisions that each party is responsible for their own debts and not liable for the other's debts. While it's difficult to predict such scenarios, these agreements can stipulate that personal debts remain the responsibility of the individual who incurred them. Overall, the outcome of the agreement must be fair and meet both parties' financial needs and those of any children of the family. Common assets that are often protected in pre and postnuptial agreements include family businesses, inherited wealth, property, and trust funds. For example, a family business can be preserved for future generations by ensuring it is not diluted in a divorce. Similarly, a personal injury settlement intended to cover lifelong care and living expenses can be protected to ensure it is not diluted in the event of a divorce. If you want to organise a prenup you should do so well ahead of your wedding. Ideally the agreement should be signed off more than 28 days prior to the wedding date. If an agreement is entered into too close to a wedding, this can lead to it not being upheld as it can suggest that potential duress is at play. Agreements may also not be upheld if the financial information provided is not accurate – and particularly if one or both partners were found to have withheld disclosure of an asset. Make sure everything is included, and that you're both honest about your financial situations. Prenuptial agreements should generally be reviewed after five years or upon certain trigger events, such as the birth of a child. It is important that the agreement reflects the financial circumstances and needs of both partners, as if it is out of date this could be a reason it will not be upheld. The review process ensures that the agreement remains fair and relevant to the couple's current circumstances. If necessary, the terms can be updated through a postnuptial agreement to reflect any significant changes. Yes, pre and postnuptial agreements can include provisions to protect future inheritance. This is particularly important in families where assets are intended to be passed down through generations. By setting out clear terms regarding inheritance, couples can prevent potential disputes and ensure that family assets are preserved for future generations. These agreements can be structured to protect the interests of children from previous relationships. For instance, they can ensure that certain assets are preserved for the benefit of these children, rather than being divided in the event of a divorce. This is especially important in blended families, where financial arrangements can be more complex. Pre and postnuptial agreements are valuable tools for couples seeking to protect their assets, ensure financial clarity and reduce potential conflicts. By understanding the benefits and legal nuances of these agreements, couples can make informed decisions that contribute to a more secure and harmonious marriage. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Yahoo
27-06-2025
- Business
- Yahoo
You might not have Bezos-level bucks, but you still might consider a prenup
Jeff Bezos and Lauren Sanchez may or may not have chosen to sign a prenuptial agreement before getting married. Such agreements normally detail what each person will take away in terms of assets, debts and spousal support should the marriage end in divorce or death. Bezos — the founder of Amazon whose net worth Forbes estimates to be north of $200 billion — has a lot of wealth to protect, should his second marriage go south. But chances are his assets and estate are already structured and professionally managed in a way that they would never become marital assets, two attorneys who specialize in prenups told CNN. So the biggest question if he and Sanchez did opt for a prenup is what payout she would get if they divorced or he predeceases her. But for everyone else wondering if they should get a prenup before saying 'I do,' there are many factors to consider for both partners. Prenups used to be stigmatized as unromantic and a sign that at least one partner (or the partner's family) didn't trust the incoming spouse or worried the marriage wouldn't last. But, in recent years, Illinois-based divorce and marital attorney Gail O'Connor, founder of O'Connor Family Law, said she has seen a huge jump in couples seeking them out. It might be a generational thing, she suggested. 'Millennials want to be very financially independent. So there is this idea of people getting married later and thinking, 'I've worked hard for this and want to protect it,'' O'Connor said. But the 'it' doesn't have to mean billions or even millions. It could just mean you've worked for a decade and built up savings, investments and stock options. Or, conversely, she said she has seen a lot of couples where one person has a large debt load — for example, $100,000 or more in education loans. 'And their partner wants to be protected from that,' O'Connor said. Prenups may make sense for couples who are on their second marriage or just marrying much later in life after accumulating assets and having children whose interests they want to protect. Or for any couple where one partner stands to inherit money or who simply has a much higher net worth going into the marriage. But the couples for whom prenups are arguably most critical are those in which one partner owns a business. 'It's not about the actual level of wealth but what the assets are (when a couple marries),' said Jacqueline Newman, managing partner of Berkman Bottger Newman & Schein in New York. While a business may not be worth much when a couple weds, it might grow greatly during the marriage — that is, of course, what happened for Bezos during his first marriage, to MacKenzie Scott. Business-owning spouses will want to protect the value of what they built, but non-owning spouses also will want to protect their financial well-being, especially if they make considerably less in their own job or are a stay-at-home parent. Especially since business-owning spouses may have a lot of control over what their actual income is during the marriage (which is likely to be considered in assessing joint marital assets and spousal support) versus what gets reinvested into their business, Newman noted. The contract can be drawn as narrowly or as broadly as a couple wants. For instance, Newman noted, a couple may opt for a prenup that basically asserts that any assets or debt in one person's name goes with that person at the end of the marriage. And any assets or debts in both partners' names are split. A very simple prenup might also just focus on a single asset and how it will be treated if the marriage dissolves. Or, O'Connor said, it could address the issue of how one partner's debt is paid off during the marriage. For instance, if any jointly held marital assets are used to make one partner's debt payments, that partner may need to reimburse the joint account. Financial disclosure by each partner is required by law. While verification of what you disclose is not necessarily legally required, O'Connor asks her clients to give her proof of their assertions by way of their most recent tax returns, W2s, stock option grants, business valuations, and bank and brokerage statements. Whether you work with a marital law attorney or a trust and estate law attorney who specializes in prenups – or if you create a legally binding agreement through online entities like – it is in each partner's best interest to be transparent and honest about what they have, what they make and what they owe, O'Connor said. If you're not, should things end badly, that can be used against you if your spouse wants to challenge the validity of the prenup. 'You don't want to build a contract subject to a successful attack. The more disclosure you have, the better,' she said. A prenup is governed by the laws of the state in which it was drawn up, Newman said. So that's something to consider if you end up living in a different state after marrying. She recommends taking your prenup to a marital or estate attorney in that new state to review your agreement to make sure it complies with that state's laws. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNN
27-06-2025
- Business
- CNN
You might not have Bezos-level bucks, but you still might want a prenup
Jeff Bezos and Lauren Sanchez may or may not have chosen to sign a prenuptial agreement before getting married. Such agreements normally detail what each person will take away in terms of assets, debts and spousal support should the marriage end in divorce or death. Bezos — the founder of Amazon whose net worth Forbes estimates to be north of $200 billion — has a lot of wealth to protect, should his second marriage go south. But chances are his assets and estate are already structured and professionally managed in a way that they would never become marital assets, two attorneys who specialize in prenups told CNN. So the biggest question if he and Sanchez did opt for a prenup is what payout she would get if they divorced or he predeceases her. But for everyone else wondering if they should get a prenup before saying 'I do,' there are many factors to consider for both partners. Prenups used to be stigmatized as unromantic and a sign that at least one partner (or the partner's family) didn't trust the incoming spouse or worried the marriage wouldn't last. But, in recent years, Illinois-based divorce and marital attorney Gail O'Connor, founder of O'Connor Family Law, said she has seen a huge jump in couples seeking them out. It might be a generational thing, she suggested. 'Millennials want to be very financially independent. So there is this idea of people getting married later and thinking, 'I've worked hard for this and want to protect it,'' O'Connor said. But the 'it' doesn't have to mean billions or even millions. It could just mean you've worked for a decade and built up savings, investments and stock options. Or, conversely, she said she has seen a lot of couples where one person has a large debt load — for example, $100,000 or more in education loans. 'And their partner wants to be protected from that,' O'Connor said. Prenups may make sense for couples who are on their second marriage or just marrying much later in life after accumulating assets and having children whose interests they want to protect. Or for any couple where one partner stands to inherit money or who simply has a much higher net worth going into the marriage. But the couples for whom prenups are arguably most critical are those in which one partner owns a business. 'It's not about the actual level of wealth but what the assets are (when a couple marries),' said Jacqueline Newman, managing partner of Berkman Bottger Newman & Schein in New York. While a business may not be worth much when a couple weds, it might grow greatly during the marriage — that is, of course, what happened for Bezos during his first marriage, to MacKenzie Scott. Business-owning spouses will want to protect the value of what they built, but non-owning spouses also will want to protect their financial well-being, especially if they make considerably less in their own job or are a stay-at-home parent. Especially since business-owning spouses may have a lot of control over what their actual income is during the marriage (which is likely to be considered in assessing joint marital assets and spousal support) versus what gets reinvested into their business, Newman noted. The contract can be drawn as narrowly or as broadly as a couple wants. For instance, Newman noted, a couple may opt for a prenup that basically asserts that any assets or debt in one person's name goes with that person at the end of the marriage. And any assets or debts in both partners' names are split. A very simple prenup might also just focus on a single asset and how it will be treated if the marriage dissolves. Or, O'Connor said, it could address the issue of how one partner's debt is paid off during the marriage. For instance, if any jointly held marital assets are used to make one partner's debt payments, that partner may need to reimburse the joint account. Financial disclosure by each partner is required by law. While verification of what you disclose is not necessarily legally required, O'Connor asks her clients to give her proof of their assertions by way of their most recent tax returns, W2s, stock option grants, business valuations, and bank and brokerage statements. Whether you work with a marital law attorney or a trust and estate law attorney who specializes in prenups – or if you create a legally binding agreement through online entities like – it is in each partner's best interest to be transparent and honest about what they have, what they make and what they owe, O'Connor said. If you're not, should things end badly, that can be used against you if your spouse wants to challenge the validity of the prenup. 'You don't want to build a contract subject to a successful attack. The more disclosure you have, the better,' she said. A prenup is governed by the laws of the state in which it was drawn up, Newman said. So that's something to consider if you end up living in a different state after marrying. She recommends taking your prenup to a marital or estate attorney in that new state to review your agreement to make sure it complies with that state's laws.
