When couples divorce, the courts will take pre-marital agreements (PMAs) into account but will also consider the needs of each spouse. This principle was demonstrated recently in financial remedy proceedings before the Family Court.
The couple had signed a PMA shortly before marrying in April 2018. They had two sons, who continued to live with the wife in the former matrimonial home (FMH) after they separated. The husband had assets of about £50 million, much of which consisted of the value of his shares in a private business. The assets in the wife’s name were worth less than £300,000.
The husband contended that the FMH, valued at £5 million, should be sold and 40 per cent of the proceeds made available to the wife to purchase a property, which would revert to him when the children completed tertiary education. He also proposed to pay her a lump sum of £818,000 in accordance with her entitlement under the PMA. The wife sought transfer of the FMH to her and an income fund of £1.87 million. She argued that the PMA did not adequately meet her financial needs.
The Court noted that its overarching duty was to achieve a fair outcome, and the weight to be given to a PMA varied from case to case. The wife would be the primary carer for the children, and the PMA contained a provision stating that it would be reviewed in the event that the couple had children.
The Court concluded that the FMH should be sold, with the wife receiving 56.7 per cent of the proceeds. The husband would pay any Capital Gains Tax arising on the sale, and pay the wife £300,000 to cover the costs of purchasing and refurbishing a property. The Court considered it would be unfair to require the wife to leave her home after the children finished tertiary education.
After analysing the couple’s expenditure during the marriage, the Court found that a sum of £150,000 per annum would meet the wife’s and children’s needs. That sum would be capitalised in order to achieve a clean break. The wife’s total award came to just over £4 million, or about 8 per cent of the total assets.
The Court was satisfied that its decision gave appropriate weight to the PMA in that the husband’s business would be unaffected, while the wife would be able to meet her needs and those of the children, although to a lesser extent than had the PMA not been entered into.