Pre-Nups: The Importance Of Legal Advice And Fairness

There is no doubt that over the past few years, pre and post nuptial agreements have gained ever increasing popularity with couples seeking to regulate a potential separation and to provide certainty. However, the recent case of Ipecki v McConnell highlights the importance of sound legal advice when entering into such an agreement.

Mr Ipecki and Miss McConnell met in 2003, started cohabiting in 2005 and married in November of the same year. There were two children of their marriage (aged 7 and 11 at the time of the financial remedy proceedings). They separated in 2016; a marriage of 11 years.

The parties entered into a pre-nuptial agreement, the effect of which would, at the time of the financial remedy proceedings, see Mr Ipecki receiving nothing following their separation.

Like many couples, it is clear to see why the parties entered into a pre-nuptial agreement. Mr Ipecki’s earnings totalled circa £35,000 per annum and he had no capital save for a 50% interest in his mother’s property in Turkey totalling circa £50,000. He did however have liabilities totalling more than £100,000.

Miss McConnell’s financial circumstances could not be more different to those of her husband. She was the great granddaughter of the founder of the Avon Products business empire, and, along with other relatives, she was the beneficiary of trusts in the USA with an overall value of, at least, $65M. She also solely owned the family home, the equity in which was over £1M after deduction of the mortgage.

The outcome of this case was that the terms of the pre-nuptial agreement were to be ignored. No weight whatsoever was to be attributed to them, resulting in an award of a lump sum totalling £1,333,500 to Mr Ipecki.

It cannot be ignored that this case had some unique features, such as the pre-nuptial agreement being drafted to confirm that it would governed by New York Law. However, there were two key elements which form the rationale behind the decision of the Court. These were the absence of Mr Ipecki receiving proper legal advice on the implications of the agreement and, the failure of the agreement to provide for Mr Ipecki in a way which would allow him to meet his needs.

Ben Lawson, Senior Associate in Geldards Family Law Team, commented:

“It is unlikely that this case will have any real impact on the enforceability of properly constructed pre-nuptial agreements where they are entered into in good time, with the benefit of legal advice and where they provide for both parties’ needs to be met.”

“However, it should serve as a warning that if the agreement fails on any of those points, the court has the power (and will use it) to make an order which either does not follow the terms of a pre or post nuptial agreement, or as Miss McConell found out, ignore the terms entirely.”

If you’d like any further information on pre-nups, divorce or separation, please don’t hesitate to contact a member of our Family Team.