Citywealth spoke to Nicola Harries, partner and family lawyer at Stevens & Bolton to find out why clients are seeking pre-nups and how they can best be used to achieve a favourable outcome on divorce.
Tell Citywealth’s readers about your role.
I joined Stevens & Bolton in 2004 after working at a boutique family firm in the city, and later a larger west end firm. Since 2016 I have headed up our family team. We look after a diverse range of clients – from UHNW and HNW individuals, to those in more modest situations. Discretion is naturally key in our field, but I can share that we are lucky to represent a diverse client range and over the years have represented everyone from footballers and opera singers to hedge fund managers and city lawyers - to name but a few!
Much of our advice and support unfortunately revolves around relationship breakdown, but on the positive side we can add value and reassurance to those getting married by advising on pre-nups. I tend to tackle the most complex family breakdown cases involving significant asset bases, complex assets structures or tax issues, as well as cases with cross border aspects. I also enjoy good relationships with a large number of intermediaries who are happy to entrust their clients to my team’s care as and when the need arises.
Are your clients behaving differently post-pandemic?
Despite an unprecedented number of enquiries pertaining to divorce, what we have seen is that new clients have been anxious about commencing divorce proceedings during the pandemic. The stop-start of the lockdowns left many with a dilemma as to when to ‘press the button’ and many simply postponed the decision. However, we are seeing clients beginning to take action in order to progress with their lives and move out of the period of limbo that they have experienced over the last year. On a more positive note, the postponement of many weddings led to an escalation in the number of pre-nups in recent months with couples having the time and space to really consider the arrangements that will work for both. It is lovely to see clients’ long-postponed weddings finally able to take place.
What should HNWIs consider before seeking a prenup?
Pre-nups help to protect wealth brought to a marriage by limiting the sharing that might otherwise occur on divorce. This is particularly important if that wealth is represented by a business. However, drawing up a pre-nup can trigger some tricky conversations so they must always be approached sensitively.
If you have children from another relationship, a pre-nup can protect them and their future inheritance. Parents passing wealth to their children often insist on a protective pre-nup as a condition of doing so. Younger couples in this situation may choose to protect specific gifted assets but share wealth accumulated as a couple, preferring to share the fruits of their mutual endeavours.
How can prenups best be used to ensure a favourable outcome?
If the basic preparatory rules have been adhered to with regard to independent legal advice, disclosure and timing, the court is unlikely to ignore a pre-nup unless it does not adequately meet the weaker financial party’s needs. A basic agreement that keeps everything for the wealthy party and gives nothing to the other is unlikely to be upheld, especially if there are minor children. Individuals must be given realistic advice about this. To avoid any awkward analysis of what might be required to meet ‘needs’, a simple agreement limiting the sharing of pre-existing or other specified assets might be the easiest and least controversial option.
What else is keeping your clients up at night?
Like the rest of us, many clients worry about the impact the pandemic has had upon their children’s education, particularly when a divorce is also happening. Those of our clients in court proceedings are deeply troubled by the strained, underfunded court system, and how that is impacting and delaying a final resolution to their situation.
The pandemic has created a lot more financial uncertainty – how viable is the family business, is an asset over or undervalued thanks to the pandemic? In divorces this uncertainty can allow parties to flex the answers to these questions to suit their own agenda, which can make a settlement harder to achieve.
What’s your best lockdown learning – professional or personal?
How valuable a commute to and from work can be for book-ending the working day and giving you the mental space to gear up for and wind down from the stresses of the workplace. Until they couldn’t happen, I never valued the 5-minute watercooler chat as much as I should have – you can’t really gauge how people are doing over Zoom. Professionally-speaking, lockdown, has required family lawyers to seek alternative and better ways of resolving family disputes outside the court system. This has led to many more options becoming available and these enable us to offer our clients more family-focussed choices than we could pre-pandemic.
Find out more on Nicola's Leaders List profile.