On 27 March, two different cases regarding Postnuptial Agreements were decided (also called post-nup or post-marital agreements), however one was found to be binding and the other was disregarded completely.

Generally, post-nuptial agreements are not strictly binding on the court in the event of a later divorce, but it is likely that a post-nuptial agreement will be respected by the court unless the effect of the agreement would be unfair in the circumstances. It is not possible in this country to have a fully binding agreement about what will happen on divorce or dissolution.

At rhw we ensure that our clients receive thorough legal advice and are encouraged to implement full and frank financial disclosure with their partner before signing any agreement.

Hopkins v Hopkins

Mr and Mrs Hopkins were married in 2009 after living together for 8 years. By 2011 they were separated, and a post-nuptial agreement was signed by both parties in “full and final settlement of any future claims”.

At the time, the wife’s solicitor advised her strongly against signing anything until there was full and frank disclosure. However, the wife did not feel it was necessary and it is report that she was “entirely happy” with the agreement.

16 months later, Mrs Hopkins realised that she needed a larger share of Mr Hopkins’ assets and she issued financial proceedings requesting a further £2 million of Mr Hopkins’ £38 million wealth.

After legal fees of some £700,000 between them, Judge Nicholas Cusworth QC said that the post-nuptial agreement was valid. He believed that at the time, Mrs Hopkins “was rational, thoughtful, saddened by her situation, but certainly capable of independent thought”. “She knew her own mind and was keenly aware of her own objectives”, he added. “I reject the wife’s case that she was operating under any undue influence, duress or improper pressure when she entered into the post-nuptial settlement”.

Gray v Work

In Gray v Work, the couple had been married since 1992. The husband enjoyed a successful career with a private equity firm based in Texas and the wife become a stay-at-home mother to their two children.

The family lived in Tokyo, Japan, for eight years, during which time the husband made many successful investments, generating millions in profits as well as significant personal wealth. Whilst there, the couple signed a post-nuptial agreement. Unlike Mr and Mrs Hopkins, this agreement was drawn up to enable the husband to change his citizenship for tax purposes.

The couple’s marriage ended in 2013 when the wife began a relationship with another man. During the subsequent financial proceedings, the husband insisted that his estranged wife was not entitled to a full share of his wealth. His initial offer was $5,000,000, which was the value of her own property within the husband’s possession or control. It represented approximately 2% of the couple’s total joint assets of $225,000,000.

Mr Justice Holman was unconvinced. He decided that it was possible the wife may not have received proper legal advice when she signed the post-nuptial agreement, and consequently she should not be held to the agreement. He also rejected claims that the husband had made a ‘special contribution’ to the couple’s joint wealth and so was entitled to keep more, departing from the general rule that assets should be divided equally on divorce. It was therefore decided that the matrimonial assets should be split 50/50.

Although each case had a very different outcome, there is one similarity: the clarity of whether each party received sufficient legal advice. Mrs Hopkins had many files of correspondence, showing that she had been fully aware of the implications of her agreement. Alternatively, there was seemingly little evidence of the wife in Gray v Work receiving sufficient legal advice, arguably because the agreement was for tax purposes at the time.

What can be taken away from this contradiction is that if you are thinking of post-nuptial or separation agreements, it is important that you take clear and thorough legal advice, and attempt full and frank financial disclosure before signing anything, so as to ensure the agreement is fair and will be binding in the future.

Victoria Clarke – rhw Solicitors LLP

If you would like any more information on this subject or any other Family Law matter please contact rhw’s Family Law Team on 01483 302000 or email family@rhw.co.uk