Happy Valentine’s Day: To nup or not to nup, and the cautionary tale of Mr & Mrs Sharp
On the off-chance you’re thinking of proposing on supposedly the most romantic day of the year, family partner Teena Dhanota-Jones from London law firm Hodge Jones & Allen mulls over the recent case of Sharp v Sharp and the ongoing debate around pre-nups.
“Even though nuptial agreements are not always binding in England and Wales,” Teena says, “I still advise clients that generally they’re a must because of the statutory discretion given to judges in England and Wales to achieve what they consider a fair split of assets at the end of the relationship.
“Clearly, everyone in dispute at the end of a relationship has their own idea of fairness but the courts follow a subjective list to make their decision based on s.25 of the Matrimonial Causes Act 1973 which always puts the welfare of children under 18 first but is then open to a huge range of interpretation.
“Allowing a court to determine how your wealth is divided based on the Act leads to ambiguity from one case to another. Anyone wanting to make certain they end up with what they should is well advised to have a pre-nup to protect their case.”
Teena says that part of the problem, clearly highlighted recently in the landmark case of Sharp v Sharp, is that the Act refers to the duration of the marriage but does not define what is a long or short marriage.
“Marriages used to be divided into three distinct terms – short, medium or long. The longer the marriage the more likely the court would seek to achieve equality in the division of the matrimonial assets, whereas a short marriage more likely meant you came out with what you went in with. But the concept of the medium marriage slowly disappeared and generally clients were advised, “this is not a short marriage”, if it was anything longer than three years.”
The Sharp’s relationship lasted seven-and-a-half years, yet the court deemed it be a short marriage, Teena says.
Originally, Mr Sharp was awarded broadly an equal share of the assets, amounting to £2.725m. During the marriage, the couple earnt roughly the same, but Mrs Sharp had received bonuses of £10.5m.
She appealed the original order on the grounds that in a short, childless marriage, where the parties had a similar income and maintained separate finances, the equal sharing of the assets was unfair. She argued that the court should depart from the principle of equal sharing because she had been responsible for most of the wealth generated during the marriage.
The Court of Appeal agreed with Mrs Sharp and Mr Sharp’s award was reduced to £2m.
“The law in England is a cauldron and allows judges to add a little bit of this, a little bit of that to come up – which makes the outcome uncertain, Teena says.
“Why would anyone chance a decision being left to the judiciary in this way? Had Mrs Sharp insisted on a nuptial agreement – something she herself conceded – she may have avoided the substantial legal fees and stress of having to appeal her case.”
Jacqueline Major, another partner at HJA, says DO strongly consider a pre-nup if:
- The wealth of the future spouses is unequal
- One party has significant inheritance prospects or gift prospects from family
- One party is a beneficiary under a trust
- One party wishes to ring fence assets acquired before the marriage
- This is a subsequent marriage where a party has children and/or assets from a previous marriage
- There are family businesses
- There are existing debts
- The parties have had an agreement drawn up in another jurisdiction and need a mirror agreement in this country.
For further information, please contact:
Kerry Jack or Nicola Pearson at Black Letter Communications
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Notes for Editors
Hodge Jones and Allen
- Hodge Jones and Allen is one of the UK’s most progressive law firms, renowned for doing things differently and fighting injustice. Its managing partner is Patrick Allen, recently awarded a lifetime achievement award by Solicitors Journal.
- For 40 years’ the firm has been at the centre of many of the UK’s landmark legal cases that have changed the lives and rights of many people.
- The firm’s team of specialists have been operating across: Personal Injury, Medical Negligence, Industrial Disease, Civil Liberties, Criminal Defence, Court of Protection, Dispute Resolution, Employment, Family Law, Military Claims, Serious Fraud, Social Housing, Wills & Probate and Property Disputes.
- In 2016, the firm launched Hearing their voices – a campaign to raise awareness and build conversations around the issues and the injustices we might all face.