Nuptial Agreements, both pre and post, are becoming more and more prevalent for couples in England and Wales. Once the preserve of European/American jurisdictions, these very useful and practically based agreements are enjoying strong support in the UK.
Domestic vs International
But how do these agreements work when the assets one party seeks to protect are outside of England and Wales? Can a nuptial agreement be truly international?
The distinction between these two types of agreement is obvious on the face of it. A domestic Pre-Nuptial Agreement deals with assets within England and Wales or assets held by a company or trust in England and Wales. Although a domestic Pre-Nuptial Agreement may purport to bind foreign jurisdictions to the parties’ nuptial agreement, consideration needs to be had as to whether a foreign court will pay heed to an English document.
Whereas an international Pre-Nuptial Agreement tends to fall into one of two camps. An English document that has been drafted to contain clauses that have been deliberately inserted to attract jurisdiction in a foreign country. Alternatively, it can be an English-drafted document which also contains as part of it, mirror nuptial agreement(s) from a foreign jurisdiction.
Will my Pre-Nuptial Agreement be recognised by a foreign Court?
In practice, the answer to this question as to which document is preferable often depends on the parties’ appetite for risk.
A solicitor will always advise parties, where there are assets in another jurisdiction which they are seeking to protect, to obtain advice from a solicitor in that jurisdiction so that they can understand for themselves the law of that country and, perhaps more importantly, how that foreign jurisdiction will treat an agreement prepared in England which purports to set out what that foreign court should do with an asset based in that foreign jurisdiction.
Matrimonial law is not universal. Concepts that are day-to-day familiar terms in English law simply are not contemplated in some jurisdictions altogether. Or there may be very different approaches by one court to another in another country. Often the best way to work around these problems is to ensure that either: –
- A properly qualified foreign solicitor amends or inserts additional wording into the English agreement to assist its binding nature in that foreign jurisdiction (for example, there is wording used in Australian matrimonial law that needs to be inserted to assist the binding nature of an English-drafted Pre-Nuptial Agreement); or
- If the concepts are incompatible, or you are advised that foreign jurisdiction is unlikely to recognise an English agreement, the best way forward is to have a Pre-Nuptial Agreement drafted with identical intent within that jurisdiction. This is known as a mirror nuptial agreement. These agreements are prepared contemporaneously to each other and the English agreement will annex a copy of the foreign version and the foreign one may very well annex a copy of the English agreement.
Whichever option is taken above, an English Pre-Nuptial Agreement can set out which country is to hold jurisdiction in case of a dispute. So even though there may be, say, a Finnish nuptial agreement, it could set out as part of its terms that any dispute is to be interpreted in England and Wales. Equally, an English-prepared document can make clear that another jurisdiction (Finland to continue the example) is used in case of a dispute.
Having mirrored agreements and advice in multiple jurisdictions can become costly and whilst seeking such advice is worthwhile and advisable: a cost-benefit analysis needs to be made. Parties may decide, depending on the value of what they are protecting, that it may not be worth the cost to have more than one agreement. In this case, they can continue with their English nuptial agreement and take the risk that it may not be as effective as they wanted at the time of any dispute.
Will my foreign Pre-Nuptial Agreement be recognised in the UK?
The simple answer to this is, yes. The primary Supreme Court case which introduced binding nuptial agreements in England and Wales was a case about a foreign Pre-Nuptial Agreement.
The English court can and does uphold and work with foreign agreements subject to the normal requirements that would also be applied to an English agreement in terms of overall fairness.
So if your assets are primarily in another jurisdiction but you do have assets to protect in England, the agreement should still be binding (but I would suggest having a mirrored agreement would ultimately be more successful).
Pros of an International Pre-Nuptial Agreement
Like all nuptial agreements, the benefits of having an international Pre-Nuptial Agreement are primarily asset protection. You are ensuring, as best you can, that your wishes at the outset of your marriage (or thereafter in the case of post-nups), are going to be recognised in another country as well as England and you are not going to be subject to the vagaries of a court based determination as to asset division.
This allows you to plan prudently and carefully throughout your married life and gives you the comfort of knowing that some of your assets, if things do go array, are protected.
These agreements can also be extremely useful (and are often used) where there are family businesses that have international operations and need protection.
Ultimately, you are trying to impose certainty on what is otherwise potentially a nebulous outcome.
Cons of an International Pre-Nuptial Agreement
The difficulty with international Pre-Nuptial Agreements is always the question of enforceability. Of course, the point of mirrored agreements is to try and close that sort of difficulty and this may or may not be ultimately 100% successful.
It also can be a costly exercise. The more widely spread the assets to multiple jurisdictions the greater the level of legal advice (and potentially legal drafting) required within those jurisdictions. This is particularly the case if the jurisdictions in question do not have similar legal concepts which can make ensuring cohesion of documentation and outcome potentially problematic.
Finally, nuptial agreements can be viewed as fairly unromantic. Whilst nuptial agreements have been used for many years in other jurisdictions their enforceability in England is but some 14 years old and there can be reluctance, particularly in certain communities, for these types of agreements to be considered.
Conclusion
Nonetheless, if the agreement is designed to protect certain assets it is always better to have an agreement than nothing at all. A nuptial agreement at its weakest will show your intention and at its best, will work effectively to protect the assets to which you want to ensure are not otherwise adjusted by a matrimonial court (foreign or not).
