Is there such a thing as an ironclad post-nuptial agreement?
What is a post-nuptial agreement, and can they always be upheld? Solicitor Linzi Perriman looks at the Presley/Lockwood case.
Lisa Marie Presley is celebrating after a judge ruled this week that she does not have to pay any spousal support to her estranged husband, guitarist Michael Lockwood, following their divorce. The couple both signed what the press are calling an ‘ironclad’ post-nuptial agreement in November 2007, a year after marriage, where they both signed away their rights to one another’s property and income.
At the time Presley filed for divorce in 2016 her annual income was reported to be as much as $2.2 million whilst Lockwood was in the red with a reported -$3,300 per year. Presley felt strongly about entering into the agreement as the majority of her wealth was inherited from her famous father.
Lockwood’s representatives argued in court that he had failed to read the post-nuptial agreement properly in 2007 before signing it as it “didn’t interest him at the time” and his solicitor at the time failed to explain to him the ramifications of signing such a document. He also went on to tell the court that Presley had hidden her wealth from him, but a statement of Presley’s assets and liabilities was attached to the agreement Lockwood had failed to read. Presley’s lawyer argued that he had the opportunity to investigate Presley’s finances at the time of entering into the agreement but chose not to do so.
Superior Court judge Dianna Gould-Saltman who presided over the three day hearing last week determined that the post-nuptial agreement is valid and enforceable and that if Lockwood chose not to read the agreement and accept the consequences that it would be upheld that was his choice.
It was found that Lockwood had entered into the agreement of his own free will and acknowledged that he was not forced to do so by Presley. There was no misrepresentation, concealed or fraud on Presley’s part.
How are pre or post-nuptial agreements treated in the UK?
The Supreme Court decision in the case of Radmacher v Granatino in 2010 shaped the way courts in England and Wales treat pre-nuptial and post-nuptial agreements.
Unlike Presley’s post-nuptial agreement, agreements of this nature in England and Wales are not legally binding, which means the courts are not obliged to give effect to any agreement reached between parties, and they cannot oust the jurisdiction of the court.
However, the court must give a pre or post-nuptial agreement appropriate weight when exercising its discretion. Therefore it becomes another consideration of the court along with the remainder of the section 25 criteria as set out in the Matrimonial Causes Act 1973.
If certain safeguards are put in place when entering into the agreement then parties can and should expect to be held to the terms of any pre or post-nuptial agreement entered into on a future divorce. These safeguards include the following:
- Any agreement should be freely entered into
- Parties need to fully understand the implications of any agreement
- Both parties need to take independent legal advice
- Both parties should exchange full and frank disclosure as to their respective financial positions
- The agreement must be signed not less than 28 days prior to the marriage to avoid allegations of undue pressure being placed on one party.
So is a pre/postnuptial agreement of value?
Where there is an imbalance of wealth between the parties thought should always be given to entering into a pre-nuptial agreement. It may be that one party has built up a very successful business prior to marriage, or may be entering into a second marriage with inherited wealth and that spouse may wish to preserve/retain the capital that they have accumulated prior to the marriage, in the event of a future divorce.
The main advantage of an agreement is that pre-acquired wealth can be ring fenced and excluded from the sharing exercise on divorce, but without an agreement such wealth may not be ring fenced. In which case, you would be left raising arguments that the pre-acquired wealth justifies a departure from an equal division of the assets.
Therefore, the existence of a pre-nuptial agreement can mean that the starting point is not an equal division of the assets but a sum to reflect the less wealthy spouse’s needs. Therefore pre and post-nuptial agreements can be a powerful tool in limiting claims on divorce, even if it cannot be guaranteed that the claims will be limited precisely along the same terms as provided for within the agreement.
Linzi Perriman is a Solicitor in the family team at Weightmans: Linzi.email@example.com