We were recently lucky enough to have Lucy Greenwood, a partner with the International Family Law Group, in the studio to share her knowledge and expertise of marital agreements (http://www.iflg.uk.com/portfolio/lucy-greenwood). Lucy is also a member of our Legal Expert Panel for the Family channel, and we are delighted to have her on board, feeding in ideas for future Family channel topics for continuing professional development (http://www.lawcolmedia.com/%5Cfamily.aspx). Lucy actually suggested we make this programme!
Here is a sneak peak of the on-camera interview we conducted with Lucy, ahead of the programme’s release on 25th January:
Interviewer: How best can a marital agreement address the issues of needs and fairness?
Lucy Greenwood: Well, this is the very difficult question that we face with every pre-marriage agreement. For example, it’s commonplace to treat the marital home a little bit differently from any other assets, even if there has been some pre-acquired money going into that property. You’ve basically got to consider – at each stage of the marriage – is the person that’s leaving the marriage without as much money going to be able to meet their needs? So obviously they’re going to have to have somewhere to live. What is deemed reasonable for their needs – and when we hear the phrase ‘real needs’ which is another phrase about a discretionary test for needs – it’s very hard to assess. So you look at the standard of living to some extent and you consider what a court would do if it were looking at the scenario without a pre-marriage agreement, and because it’s a compromise you would look to see what the lower end of that bracket that the court award would comprise. And it’s those sorts of weighing up kind of decisions that you have to make, and there is no right or wrong answer. But if you don’t meet needs it’s pretty clear from the case law that there’s a great risk that the court will still intervene either partially or totally in the agreement. But it mustn’t be forgotten that even if it does intervene, because you’ve got this agreement, it’s likely to calibrate the award that is made. And so they are still very useful tools even today.
Interviewer: What common misconceptions do you find clients have in relation to foreign marital agreements or the enforceability and other jurisdictions of agreements entered into here?
Lucy Greenwood: Well, this is a very common myth. For a start, many people think that they could only divorce in the country they married, which is obviously not true. And similarly, they forget that it’s not actually where you enter into the marital agreement that counts, it’s where you are if and when the marriage breaks down. And so what we tend to do is we will address which country somebody is most likely to live in and get advice from those countries as to what their rights would be. We have very many situations where clients will come into the office and say ‘it’s alright, we’ve got a community of property or we’ve got a separation of assets, property categorisation, property regime in a European country, so they can’t touch my assets on…’. And we say unfortunately it doesn’t work like that in England, it’s nothing but a factor. It’s just one of the many section 25 factors that we have to look at. And, of course, depending on the weight and the understanding and the disclosure and all of the fairness aspects around the creation of that agreement the court may or may not abide by that agreement, but many have a real shock when they come in and find that it didn’t really mean as much as they thought it did. There’s also the issue of Brussels II legislation, and first in time to issue, which can’t be usurped by a marital agreement. So this can have a very significant effect. So even if you’ve got a marital agreement in a particular country if you don’t get first in time when it comes to issuing a divorce procedure there’s still a risk that another country, like England, might be looking at your French marriage agreement. And, of course, there’s the maintenance regulation, and if you’ve got maintenance aspects in the pre-marital agreement, spousal maintenance I’m talking about, not child maintenance, but if you’ve got a spousal maintenance agreement there that’s a prior agreement and therefore you could find that different parts of the case are being dealt with in different parts of the world.
Interviewer: So what specific clauses should practitioners ensure that they draft into marital agreements where there’s a possibility that the couple may move abroad?
Lucy Greenwood: There are certainly no hard and fast rules in relation to this particular question. You really have to look at the scenario that you’re faced with. You need to consider whether you’re going to put in a sort of catch-all phrase to say that this agreement should be recognised around the world. That’s not going to be enough, but it gives an indication. You look at choice of law clauses and in relation to EU countries you can actually sometimes, if you’ve got a strong enough connection, actually choose the country’s laws which will apply to the pre-marriage agreement but, again, Brussels II can usurp that. So there is nothing easy about looking at jurisdictional aspects in marital agreements. And many people think that you can do one and it’s definitely going to be binding all round the world, it is not. You really have to tailor it to the countries that are most likely to be the countries in which the parties are living and consider the factors and the pros and the cons of choosing a jurisdiction, if that’s what you’re trying to do, over being silent on that issue.
Interviewer: And what particularly public policy or religious issues might need to be taken into account?
Lucy Greenwood: Well, this is quite interesting. Generally with pre-marriage agreements the consensus is that child maintenance should not be dealt with in a pre-marriage agreement or if it is it’s definitely something a court could review because it would be against public policy to bar the courts from doing that. But there are other more perhaps less obvious ones when you’re dealing with certain countries. So in countries, for example, like Singapore and Dubai where same sex marriages or even homosexual relations are not actually recognised or accepted or legal then you’re not going to be wanting to do an agreement or seek to uphold it in that country if it’s for a same sex couple. But there are others that are not so obvious. And, for example, adultery clauses are becoming something that’s been debated recently and some people are advocating where clients want to make a point that somebody should not benefit as much if they commit adultery, that should go into the agreement. But, again, be cautious with places like Dubai where adultery, again, is illegal and the implications for your potential client of even having that word or the court learning that they’re getting less because of it could have very major implications for that client. So it’s those sorts of factors, cultural factors, religious factors. You might want to cover, for example, dealing with the Get in the Jewish pre-marriage agreement so that it’s clear as to how that process is going to be undertaken. Just those sorts of things.
Until next time…
LNTV insight 