With bitter weather, grey skies and credit card bills tumbling in, it is no real wonder that the New Year sees an upsurge in enquiries about obtaining a divorce.
Unfortunately for those seeking divorces, agreeing the financial settlement can be a long, stressful and expensive process, which is why having a pre- or post-nuptial agreement in place is a sensible idea in many cases.
It has been reported that Elin Woods, the wife of golfer Tiger, negotiated a ‘pre-nup’ worth more than $20 million when she married him. Since his marital transgressions became public knowledge, the golfer’s earning capacity has plummeted as advertisers back away from a man whose squeaky-clean image has been destroyed. The result has been the negotiation by Mrs Woods of a ‘post-nup’ said to be worth an additional $75 million, which commits her to helping him rebuild his image.
The Woods saga may make one think that pre-nups and post-nups are only for the super-rich, but this is not the case. They should be considered by couples of much more modest means. In particular, thought should be given to a pre-nup (or post-nup if circumstances change after the marriage) when:
- there is a significant disparity of wealth brought into the marriage;
- there is the likelihood that one of the couple with acquire (e.g. by inheritance) significantly greater wealth after the marriage;
- where financial arrangements are made which make wealth division unequal (a common situation is where the house of one spouse is sold on marriage and the proceeds of the sale are used to pay off or reduce the mortgage of the other spouse, but the title to the property remains in that spouse’s sole name);
- where the earning capacity is very unequal; or
- where one spouse gives up a promising career to allow the other to pursue theirs.
Pre-nups are not romantic to think about, but there is no escaping the fact that more than 125,000 divorces take place annually in England and Wales. Although they are strictly unenforceable, a pre-nup undertaken with the benefit of professional advice on both sides and without duress is highly persuasive to the court. Post-nups are enforceable.