What's the impact on financial provision in the event of divorce?
03 September 2015
In a case heard in the High Court in June 2015, the main issue was the impact the prenuptial agreement should have on the assessment of the husband's financial needs.
The couple had been married for 10 years and separated in 2012. They had two children, aged 13 and 10 at the time of the hearing.
Prior to the marriage, at the wife's request, the couple had entered into a prenuptial agreement in which they agreed that neither would make any financial claim against the other, in the event of divorce. Both parties had provided financial disclosure and received separate independent legal advice in relation to the agreement.
Although not understood by the wife at the time of the agreement (because the husband had deliberately exaggerated his financial position in his financial disclosure for the prenuptial agreement), the husband had never generated any substantial income and his only significant capital at the time of the agreement was a house which he had sold for just under £0.5 million. In contrast, the value of the wife's assets, nearly all of which were inherited and held in trust with the rest of her family, was about £27 million (£16 million at the time of the marriage). She worked as a director of a London Art gallery.
The husband claimed that he did not have a full appreciation of the implications of the agreement when he signed it. He also argued that the agreement failed to meet his financial needs and that he should receive more.
The wife argued successfully that the husband's needs should be assessed at a lower level than would have been the case had the agreement not been entered into by the couple.
The judge held that significant weight should be attached to the prenuptial agreement that the parties had signed. He held that it would be fair to the husband to attach significant weight to the agreement and to hold him to the agreement, unless his financial needs dictated otherwise and, similarly, that it would be unfair to the wife (who would not have entered into the marriage without the agreement) not to do so.
The judge then went on to award the husband the financial provision proposed by the wife to meet his housing needs in his role as a parent, ie a housing fund of 1.7 million (to enable him to buy a 4-bedroom house in South-West London), which would revert to the wife on his death and would include a "stepdown", once the youngest child was 23, when 45% of the housing fund would revert to the wife, forcing the husband to downsize. The husband's income needs were similarly assessed at a modest level.
This case is another example of how the assessment of a spouse's financial needs is more restrictive where the parties have signed a marital agreement, in contrast to the more generous assessment of financial needs on divorce, where no agreement has been signed, in a "Big money" case.
WW v HW [2015] All ER (D) 167 : judgement delivered 10 June 2015
Maeve O'Higgins Family Law Partner, Burlingtons Legal |
Email: maeve.ohiggins@burlingtonslegal.com, Tel: +44 (0) 207 529 5420
This blog is intended for general information only and should not be considered as giving advice in relation to any individual case nor be taken as applying to any particular case. No liability is accepted for any such use of the information contained.