Prenups and International Divorce

Recent press articles have reported an increase in Parisians moving to London to avoid new tax legislation and levies on their wealth in France.  This is leading to a housing boom in places such as South Kensington and Belgravia.  However French nationals moving to London to protect their wealth from tax may be putting their wealth at risk from divorce.

Traditionally, wealthy individuals in France will require their spouse to enter into a separation de biens agreement on marriage to keep their assets separate during their marriage and on divorce.  In France this would mean that on divorce the French Court could make some provision for maintenance/compensation but broadly speaking a wealthy French individual could protect their assets from division. 

However, they need to be aware that once they have lived in England for 12 months, the English Court would have jurisdiction to deal with their divorce and it would have a vastly different approach to the French Court. 

For example, in the recent case of Z v Z involving a French couple living in London the English Court gave a French wife 40% of the assets, despite the fact that she had entered into a separation de biens agreement.  There was also a similar case involving a Spanish national (B v S) where the wife received 50% of the assets and maintenance of £10,000 per month.

Therefore any wealthy individual moving from France to England should seek legal advice before taking up residence in London.   It is likely to be in their interest to enter into an English postnuptial agreement or an additional agreement confirming that maintenance on divorce be dealt with by the French Courts rather than the English Courts.  This would prevent the sort of order that was made in the case referred to above. 

Of course, what is true for French nationals applies equally to any foreign national moving to England.  Just because you have already have a foreign law agreement in place with your spouse this won’t protect your assets on divorce unless it is compliant with English law.

Foreign marriages and foreign divorces

When a couple separate, there is often a great deal of confusion about the relevance or otherwise of a marriage which took place abroad.  A typical question would be: “If I got married in Mauritius, can I get divorced in England or do I have to get divorced in Mauritius?”

Questions are also asked about the need to register an overseas marriage in England if the couple live here.

Essentially, if the marriage is valid where it took place then it will be recognised under English law and, whilst it may be possible to also get divorced in that country, you can get divorced here as long as you are habitually resident or domiciled here.

After getting married abroad, some couples go on to have a second ‘marriage’ ceremony in England for the benefit of friends and family (or for religious reasons) and the status of this subsequent ‘marriage’ can cause confusion.

Is this second ceremony a valid marriage under English law?

Usually not, but how you approach it is important because if your lawyer takes the wrong legal steps on separation it may affect your ability to bring or prevent a financial claim. 

The English Courts may also recognise foreign divorces (whether in relation to a foreign marriage or an English marriage).  Again, the extent to which further proceedings are required here will depend on whether you wish to bring or avoid a financial claim.

Financial claims for unmarried couples in England

The free movement of people is one of the central pillars of the EU.  As a result within the EU there are couples whose relationships will be recognised in their country of origin but not in the country where they are currently living.  These relationships take many forms, for example, married heterosexual couples, married same sex couples, civil partnerships between same sex couples, civil partnerships between heterosexual couples and cohabiting couples (whether heterosexual or same sex).

Under English Law only heterosexual marriages and same sex civil partnerships give rise to financial claims on separation.  However, if another EU state makes a maintenance order in favour of a person that will be enforceable in England even if English law does not recognise the status of that relationship.

Therefore, when advising a separating couple in England, it is always important to consider the nationality / domicile of the couple.  For example, if there is an unmarried same sex or heterosexual couple living in England who are both of Irish domicile they would be able to bring a financial claim in Ireland under the EU Maintenance Regulation which would then be enforceable in England.  Depending on the couple’s nationality there would be similar possibilities in other EU countries

As maintenance can include payments of capital or property transfers it is important to take expert advice from an international specialist as otherwise you may be told incorrectly that you cannot make financial claims against your ex partner

Expat Divorce

The standard advice on divorce if you are the wealthy party is to avoid the English Court as this will not be to your advantage financially.  Therefore wealthy expats often rush to issue divorce proceedings where they are resident, particularly if the country is another EU state where first past the post is conclusive.

However, what if you are an expat who is married to another EU national and you are living together outside of the EU?  If you have no (or limited) assets in England and a high income in your country of residence then it may be to your advantage to issue divorce proceedings in England.

This may seem counter intuitive when the English Court ordinarily has the power on divorce to make wide ranging financial orders against you.  However, if the English Court’s jurisdiction for divorce is based on your sole domicile, the English Court cannot make a maintenance order against you (unless your spouse moves to England).  They can of course make orders against your other assets but if these assets are joint or are based outside of England such an order is unlikely and/or may be ineffective.

Don’t forget that not all British expats are the same.  For example, different laws apply to England  and Scotland.  Therefore, one expat may have Scottish domicile and the other English domicile.  If you are an English expat married to a Scottish expat, with assets in your sole name and a high income it would be wise to issue divorce proceedings in Scotland as this may result in no financial order against you at all because the Scottish Court could not order you to pay maintenance and will allow you to keep the assets in your sole name.

Prenups and International Divorce

Following Radmacher v Granatino, foreign nationals living in the UK who have entered into a prenuptial agreement/marriage contract in their home state may have been advised that their agreement was likely to carry significant weight if they got divorced in England in the future.

The recent case of Z v Z involving a French couple living in London may have poured cold water on that notion.  In this case, the total assets were £15 million (of which 90% were in the husband’s sole name).  On marriage the couple entered into a separation de biens agreement, i.e effectively an agreement to keep their assets separate during their marriage and on separation.

Nevertheless, after assessing the wife’s needs, the English court awarded her 40% of the total assets.  This decision for the wife would have been inconceivable in France but under French law it is not possible to exclude (or limit) a claim to maintenance by agreement which meant the English Court was able to make the award on a needs basis, albeit needs generously assessed.

This case contrasts markedly with Radmacher where the husband agreed not to make any financial claims against the wife and therefore was limited to an award based on the needs of his children.  However, what would have happened in Radmacher if there had been no children and if there was a binding maintenance agreement under German law?  The situation would not be the same for every foreign national but in each case English advice needs to be taken before a foreign couple move to the UK. 

The advice will depend on what can be done under the local law but the French husband in Z v Z would have been well advised to have had a subsequent agreement which fixed jurisdiction to deal with maintenance in France.   This would have prevented the English Court dealing with maintenance and almost certainly would have led to less generous orders in France.