Many of the readers of this article may (or indeed, may not!) be aware of Taylor Swift and Travis Kelce’s Love Story and their recent engagement. What many readers may not be so familiar with is whether a pre-nuptial agreement (commonly referred to as a “pre-nup”) could help them avoid any potential Bad Blood in the future.
Marriage is a significant financial event. Marriage creates duties between spouses, and the court has a wide discretion to make a range of financial orders on divorce, including in respect of the transfer of capital/ property or the payment of maintenance. The court is guided by the overriding principle of fairness and is tasked with the role of ensuring that where possible, at a minimum, both parties are able to meet their needs. The starting point is that spouses share their marital acquest equally (i.e. they receive 50% of the assets that have accrued since their seamless cohabitation). However, where this award does not meet one of the spouse’s, and any children’s, needs, that spouse may receive a greater share of the marital assets. Furthermore, the other spouse’s non-matrimonial assets (i.e. assets accrued before the parties’ seamless cohabitation or after their separation or derived from a source outside of the marriage, such as an inheritance) may be invaded. It is not surprising therefore that many couples seek a degree of autonomy and financial certainty in advance of their approaching wedding.
Pre-nups are agreements entered into between couples prior to marriage and seek to determine what should happen to their finances in the event that they later divorce. Couples often find it easier to discuss what a division of their finances might look like when they are in love, rather than after their relationship has ended.
Whilst pre-nups are not automatically binding (as parties cannot fetter the court’s discretion to consider their finances and an appropriate settlement on divorce), where a pre-nup has been entered into early and with the benefit of legal advice, it is, in our experience, likely to have a determining impact. It will be necessary for parties to exchange detailed financial information and a pre-nup will not be upheld where it fails to meet a spouse’s needs, but how needs should be assessed in the context of a pre-nup is a complex area of law. As pre-nups are not yet binding in Jersey, bespoke legal advice is critical to better the chances of your pre-nup being upheld at a later date.
It is a common misconception that pre-nups are only useful for high-net-worth couples: in fact pre-nups can be beneficial for many working professionals, particularly where they come into the relationship with assets derived from their hard work and pre-marital endeavours, or where they have been married before and would like to safeguard assets for their children from previous relationships.
Pre-nups can therefore be an important wealth protection tool. It is important to start discussions in good time before a wedding and, in any case, a pre-nup should ideally be signed between 28 days and six months before a wedding. There are ongoing discussions in the profession and a possibility that the law might change in the short-to-medium future to increase the likelihood that pre-nups will be binding, provided that certain safeguards are met.
Please get in contact with a member of our family team if it would be useful to receive any further information or to discuss how we might be able to help you. We are happy to have a no-obligation telephone call/ meeting to discuss your matter in confidence.
Words by the Carey Olsen family law team, pictured left to right Lauren Glynn, Counsel, Victoria Cure, Senior Associate and Tara Lee, Associate.
