The plans to make prenups legally binding in England and Wales could have benefits for British expats.
Prenuptial agreements are legally binding in other European countries as well as the United States. The government is currently considering the recommendations made by the Law Commission last month, which suggested that prenuptial agreements should become legally binding in this country.
Although prenuptial agreements are traditionally used by the very wealthy as a way to protect their assets in the event of divorce, prenups have started to gain more widespread appeal.
It is hoped that by recognising these agreements as legally binding, divorcing couples in England and Wales will be able to separate with clarity and without undue delay.
However, as well as being popular with the very wealthy, prenups could also be useful for expats who sign an English prenup, says Emma Collins, a partner in the family and private client team at Weightmans LLP.
Emma Collins told the Telegraph how signing an English prenup could yield many advantages for expat clients.
“Currently, if a British citizen is living abroad, they may find that England is not the only country that would have jurisdiction to deal with their divorce,” explained Ms Collins.
“Many countries have a separate set of rules about the correct law to apply to the financial aspects of a divorce, and while some impose their own law – which may become problematic when dealing with assets remaining in the UK – others will instead seek to apply English law.
“Therefore, divorcing in a foreign jurisdiction but applying English law may require the couple to pay for advice from experts in two different countries, significantly increasing the overall cost of the divorce.
“If England is the obvious jurisdiction to deal with the divorce, the only reason one party may wish to file for divorce in another country is their belief that the court in that country will give them a better financial settlement than the English court.”
A prenuptial agreement made in Britain could be used to prevent that tactic, she explained.
“A prenup that the English court would uphold as binding would allay those concerns as it could limit the claims of the other party without the complications a foreign divorce could entail,” explained Ms Collins.
“For expats, one of the main advantages of a prenup is that it can give much-needed certainty on what assets are taken into consideration in a divorce.
“Under EU law, couples have the option to specify in a prenup which country deals with maintenance payments – and as the law in different countries on when maintenance payments should be made can vary, this can be an advantage.
“In some European jurisdictions, maintenance payments will only last for a number of years – three or five for example. In this country, they can sometimes last indefinitely.”
And, said Ms Collins, it would be wise to consider getting a prenup even though the Government has yet to adopt the Law Commission’s proposals.
“Expats and those thinking about moving abroad should seriously consider a prenup. Even now, a properly negotiated prenup provides a greater degree of certainty. It gives the couple a level of autonomy and freedom from judicial interference in what should happen to their assets on divorce,” she said.
“For the wealthy spouse it should limit their liability to the less affluent spouse. A prenup can also recognise assets accumulated prior to marriage, gifts and inheritance as separate to joint wealth.”