Western Mail, 6th May 2006
Welsh couples are clearly not in the same financial league as Tom Cruise and fiancée Katie Holmes, who this week signed a £22m pre-nuptial agreement. Lawyer Thea Hughes, Partner at Wendy Hopkins Family Law Practice, explains that people tying the knot are increasingly keen on following the path of such superstars.
No couple ever enters into marriage expecting it to end in divorce, but take one look at Tom Cruise’s decision to demand a prenuptial agreement and you’ll see why interest in these agreements is becoming increasingly common.
To promise his future wife some £22m in case their marriage ends in divorce is clearly very generous, but in terms of Cruise’s total wealth, it represents only a percentage of what he has earned or is likely to earn in the future.
Now of course not everyone has the fabulous wealth of Cruise at stake. However, if what we read in the celebrity pages is true, then he certainly intends to do everything to keep it. And more and more of us want to follow his lead.
Most people shy away from pre-nuptial agreements precisely because they are afraid of being negative about the long-term prospects about marriage; that perhaps the agreement will cast some sort of spell on their marriage.
But think about it; most people would not do anything else in this day and age without having some sort of insurance, so why should something as important as marriage be any different?
As family lawyers, we are often asked about the possibility of helping a couple make a pre-nuptial agreement before entering into a marriage. The normal reason for asking is that at least one of the parties to the intended marriage wishes to preserve previously acquired assets from the jurisdiction of the divorce courts.
The increase in the number of such requests is, I believe, a direct result of developments such as the Cruise-Holmes factor and the resulting influence of television and the widespread exposure of the UK to US law.
The pre-nuptial agreement is a commonplace of US matrimonial law but while it does not yet have the same status in the English courts, the presence of a ‘pre-nup’ is being increasingly taken account by the courts here.
Traditionally, the English divorce courts is to look at all the assets of the marriage at the time of the divorce and to distribute them.
This paternalistic approach is very different from the more “free market” approach which prevails in the US and which allows the parties to a marriage more freedom to regulate their own financial affairs in the event of divorce.
English courts take the view that the truth of the matter is that it is extremely difficult if not impossible to foresee all eventualities and later events have a habit of quickly making previous agreements seem very irrelevant.
Say, for instance, a man comes to a marriage with a sizeable fortune and his wife nothing. The man might wish an agreement to the effect that his wife should have no claim on his pre-existing wealth in the event of divorce. Indeed, this is one of the main reasons for wishing to make a pre-nuptial agreement.
The wife might willingly agree to this because she might consider it fair and content to lay claim only to a share of those assets which were built up during the course of the marriage.
If this marriage were to break down after just over a year then the agreement may seem reasonable enough. But should it still be upheld if the marriage had lasted, say, five years and there were children?
Supporters of pre-nuptial agreements argue, on the other hand, that such agreements have many benefits.
For example, they may protect family property and possessions intended to pass down through generations, they may protect parties of different nationalities who hold assets in another country and they will help put financial expectations on the table before the wedding
Thinking this way may seem cynical, but on the other hand it could be seen as a sensible and practical step.
The pre-nuptial agreement is sometimes called a pre marital agreement or more commonly a ‘pre-nup’. Whatever you wish to call it, it is essentially an agreement that is entered into before marriage and which attempts to deal with the couples assets in the event that the marriage breaks down by separation or divorce.
It can also include the provisions for spousal support, the effect on life insurance, pensions and other policies and for many business owners, the provisions for the future split of such a family business.
When you take one out you are proving to each other that you want your marriage to be based on fair and equal grounds. You are showing everything you have, literally laying your cards on the table.
Our experience of our team of family lawyers at Wendy Hopkins Family Law Practice is that the dividing up of assets often causes most conflict in a break-up.
A pre-nuptial agreement can help in certain circumstances because it allows both parties to agree on a fair and acceptable division of property, personal possessions and financial assets.
Also, couples considering second, or maybe even third, marriages as in Tom Cruise’s case may have particular reason to consider a pre-nuptial agreement. Having lost part of their capital already through divorce they will be more keen to preserve it following a re-marriage.
Although pre-nuptial agreements are not yet legally binding in Britain I would not be surprised if the law begins to accept them increasingly in the years ahead. After all, we do seem to be increasingly adopting many elements of US legislation and lifestyle.
Recently, one or two judges have been paying attention to pre-nuptial agreements although they still must take all circumstances into account.
I also have little doubt that Hollywood celebrities will enter into pre-nups as a matter of course. With society’s devotion to our film and TV stars, I see the numbers of ‘pre-nups’ increasing dramatically in the years ahead and family law practices such as ours in the forefront of providing advice on the topic.