A cautionary tale on marriage without a prenup

As Russell Brand and Katy Perry go their separate ways after just one year of marriage, Russell stands to gain an estimated £20m of Katy’s fortune. Reports suggest that Russell and Katy did not sign a prenuptial agreement (prenup) so under Californian Law Katy will have to part with her hard earned cash to achieve a 50:50 split of their wealth.

According to the Office of National Statistics 2010 saw an increase in the number of divorces in the UK, up 4.9% on the previous year. The average length of the marriage was just 11 years and the average age of parties between 40 and 44.  

So why is divorce on the increase?

Some commentators are citing the credit crunch as a key factor. It has certainly created a great deal of financial stress for couples but the more cynical are suggesting that as the value of investments and properties has plummeted, tactically it has been a better time to divorce. With economic predictions for 2012 still dire, this upward trend in divorce could well continue.

Most couples do not have the sort of wealth that Russell Brand and Katy Perry enjoy but there has been a real interest in prenups for couples who are realistic about the possibility of divorce, particularly when one or both parties have been married before, or for those who are bringing assets into the marriage.  

A court ruling

In yet another English court case regarding prenups, which was published last month, the High Court upheld a prenup which a couple had entered into six years before they divorced, even though there had been no formal legal advice and no proper financial disclosure at the time. Normally the courts will want all parties to have proper legal advice before signing a prenup. The Judge acknowledged that weight should be given to the autonomy of the parties in making the prenup and that, in the circumstances of the case it provided a “good and powerful” reason for departing from an equal division of the assets, and restricting the wife’s financial claims.

So, the message is clear. Divorce is on the rise. If you have assets or high earnings to protect, or are likely achieve wealth in the future, make sure to get advice on a prenup and on how to introduce the subject sensitvely, before tying the knot. Don’t leave yourself exposed like Katy!

For further information or specific advice, please contact a member of our family team:
 

Robin Charrot
Tel: 0161 234 8808
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Kim Aucott
Tel: 0161 234 8874
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