Pre-nups are for Billionaires – not for ‘normal’ people

Myths and misconceptions can cloud the process when it comes to family and divorce law.

At Boodle Hatfield, our team understands the importance of clarity and accurate information during life’s most personal and challenging times. That’s why we’ve created our Family Law Mythbusters series—to address common misunderstandings. Partner, William Rollin outlines the answer to the below myth.

Myth: Pre-nups are for Billionaires – not for ‘normal’ people

Pre-nuptial agreements (AKA pre-nups) only developed traction in the courts of England and Wales upon a Supreme Court decision in 2010. As a concept therefore – pre-nups are in their infancy in this jurisdiction. Our experience (and current divorce files) show that pre-nups are still far from commonplace. Take-up has been slow – perhaps because public awareness is influenced by the reported (court) cases which have attracted attention in the press.

Reported cases tend to involve significant (sometimes extreme) wealth, so it is unsurprising that many believe that pre-nups are just for the uber-rich. This, however, is a myth to be debunked. In our experience as expert family lawyers – carefully advising very wealthy, wealthy and also entirely ‘normal’ people – we can say with confidence that pre-nups can be for all sorts of people.

A pre-nup starts as a blank canvas. Experienced family lawyers will explore the landscape of a couple’s sole and joint finances, their financial history, family resources and future expectations. Family lawyers need insight into the mindset and objectives of their client before they can advise about the architecture of a pre-nup. A good family lawyer can offer (and advise on) multiple different flavours and options for wealth protection by way of a pre-nup.

The well-worn cliché that “lawyers advise, but clients decide” is still very valid.  Some pre-nup options will instantly feel like a good fit – some will be absolutely unacceptable to the couple in question.  Working in collaboration with our client, and negotiating with their future spouse’s solicitors, we look to find the optimum balance of a pre-nup that provides reassurance and certainty at the same time as delivering an outcome which is fair.

Of the very many options which might be explored in a pre-nup – here are some of the ideas we have recently discussed with clients:

• Protecting an heirloom (be it a Steinway, Turner or tiara) from claims on divorce
• Limiting the scope of claims if the marriage ends quickly
• Setting expectations for the amount and duration of maintenance payments
• Excluding claims against the capital value of shares in a family business
• Restricting claims against family farms which have passed through generations
• Limiting claims against property / savings / investments already owned by one party
• Regulating the extent of claims against assets already inherited by one party
• Protecting the value of future inheritances
• Limiting claims against the value of a pension already acquired by an older fiancé(e)
• Ensuring the viability of owner-managed businesses in the event of divorce
• Guaranteeing that family gifts remain with the person whose family gifted them
• Agreeing how the couple would approach financial negotiations if they should get divorced

These are just some of the kinds of provision that clients of ours have incorporated into their pre-nups. It is clear therefore that you don’t have to have billions to make a pre-nup worthwhile.