Family lawyers advising HNWIs and UHNWIs at a happy time in their lives often have to deal with a two-fold situation: clients want to protect their wealth in the event of a divorce from their partners, and you automatically suggest a pre- or post-nuptial agreement ('PNA'). But very often, those same clients (or their partners) have extensive links with several jurisdictions other than England and Wales, and they would like reassurance that the PNA will protect them, à la Daft Punk, around the world…
Granted, an unqualified guarantee that the PNA will be bullet-proof and all its terms will be upheld in any jurisdiction in the world is simply not possible. But what questions do you need to ask yourself in order to prepare an omnibus document that gets as close as possible to that chimera of a universally accepted PNA?
Jurisdiction
Discuss with the parties and the other side if choosing the courts of England and Wales to be the ones that deal with an eventual divorce (and its financial consequences) is the best idea. For that, you will need to consider first whether there are any other jurisdictions available, and whether any of those are more favourable to your client's interests. For example, the PNA may be fully binding in some jurisdictions, and if you are acting for the financially stronger party that is likely to be in their interests. Do not assume that England is automatically the best place to have the matter heard because, as much as family lawyers appreciate the fairness and flexibility with which the English courts deal with family cases, what a client entering a PNA usually wants is certainty over fairness.
In addition, you will also need to consider and understand what the financial provision for the financially weaker party is likely to look like in the other potential jurisdictions if the PNA is not upheld. Do not stop at the figures - check also the rules of procedure, including disclosure obligations, and other issues such as whether non-matrimonial assets are automatically excluded from the pot, if pensions can be shared, etc.
Clients must be advised that there are strict rules dealing with jurisdiction, and a clause such as this will only be effective if, at the time of issuing proceedings, the parties meet the statutory criteria to file proceedings in any given jurisdiction.
Applicable law
Will the parties choose English law to be the one applicable to the divorce – and, by extension, to the financial proceedings? And if so, will this choice of law be upheld overseas?
International family lawyers are familiar with the notion that many civil law countries have rules of private international law that provide for the applicability of foreign law to divorce proceedings in certain cases. Consider if that is to your client's advantage, but also whether, if English law is applicable, the foreign courts are actually equipped to understand, follow and apply English law correctly. There are many countries that do not have specialised family courts or judges; in civil law jurisdictions where everything is codified, judges may have a hard time applying principles that are alien to them in their vagueness and flexibility. The outcome may be uncertain, which will often be the opposite of what a client wants.
Maintenance
Check if jurisdiction for maintenance claims follow jurisdiction for divorce and financial claims in all the potential jurisdictions with which the parties have links. In many countries, particularly across the EU due to the effect of the EU maintenance regulation, maintenance claims are separate from financial claims arising out of the so-called matrimonial property regimes.
Make sure that you always mention maintenance claims specifically in any jurisdiction and choice of law clauses, and in any waiver of future claims.
The PNA should refer to maintenance claims separately, and if it contains any provisions designed to provide for a party's needs, it should identify those provisions as such by reference to both 'needs' and 'maintenance' – otherwise your client may risk further maintenance claims on top of those the PNA provided for.
Enforcement
If the PNA makes specific financial provision for one of the parties (rather than simply confirming the principles that should apply in the event of a divorce), identify the location of the assets that are likely to be used to satisfy that provision, and whether any enforcement issues may arise in that jurisdiction. For example, if the PNA provides for the transfer of a property that is registered in the name of one spouse only, the recipient may have problems implementing this if the party that owns the property does not cooperate with the transfer by signing the relevant paperwork, etc.
Take into account that undertakings are unenforceable in many jurisdictions. And of course, always keep an eye on the tax man!
Provisions on death
Look into whether the parties have Wills. If they do, check whether they are a single worldwide Will or several Wills in different jurisdictions. If they have several Wills, check which assets are covered by which Will, which law will apply to their estate, and whether the law in question provides for forced heirship or grants full testamentary freedom.
Ascertain that the PNA is compatible with the parties' Wills and, if it isn't, make sure the Wills are varied as necessary. You will also need to consider if the PNA takes precedence over the Will in every jurisdiction involved if a party dies before the relationship breaks down.
Formalities
To increase the chances of the PNA being upheld in all the relevant jurisdictions, make sure the parties comply with all the procedural formalities. For example, if they are signing the PNA before getting married, they may be required to sign it a certain number of days ahead of the legal ceremony of marriage. It may be that a notary or other administrative officer needs to be involved in the signature, or that the PNA needs to be registered (in which case, ascertain if there is a way to protect the privacy of the parties).
Rely on trusted local contacts who specialise in international family law or, if you do not have any contacts in a particular jurisdiction, do some research on organisations that count reputable family lawyers in their ranks, such as the IAFL, AIJUDEFA, or the IBA. This will require mountains of time and patience, as things can sometimes get lost in translation, particularly where there are legal and cultural differences that the lawyers on either side may not appreciate at first.
UK-based intermediaries, such as wealth managers or tax advisors, and practitioners in other areas of the law, such as private client, immigration, residential property or corporate solicitors, must also be alert to these issues when dealing with foreign clients with interests in England and Wales - and those interests can range from buying a property here, to moving here, permanently or temporarily. Amongst those of them who are married or in a civil partnership, it is a given that most, particularly those coming from civil law jurisdictions, will have signed a marriage contract, a marital agreement, or whatever the local variant of a PNA is called in their country of origin, usually electing one of the statutory matrimonial property regimes. Because those agreements are fully binding in their jurisdiction on divorce and on death, these clients are likely to assume that their PNAs will enjoy a similar status in the UK, when nothing could be further from the truth. If they have a risk of England being a potential jurisdiction in the event of a relationship breakdown, they must be advised to take family law advice immediately. The English courts have a well-earned reputation of being very generous with the spouse who is financially weaker; early steps, such as complementing the original marriage agreement with an English PNA, are key to avoid a legal battle that can end up costing hundreds of thousands of pounds in fees, decimating the clients' wealth, and causing a huge amount of stress.
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