Uncertainty will mean more ‘conditional agreements’
Miles Geffin, legal director, Mishcon de Reya also predicts an increase in the numbers of internationally wealthy individuals relocating to the UK with their families.
Will the plummeting pound, cause concern among your divorcing clients?
Yes but experience from the 2008 financial crisis suggests that valuation evidence will be treated with extreme caution and there is likely to be more appetite for the sharing of riskier assets rather than the trade-off between spouses of risk-laden and copper-bottomed or reliable assets that ordinarily prevails in more bullish times. We may also see more conditional agreements as a response to both economic uncertainty and the long-standing reluctance of the family courts to reopen final agreements made between spouses other than on the grounds of misrepresentation, fraud or unpredicted events.
Are clients redrafting prenups and postnups?
The difficulty in pricing the cost of Brexit into the value of capital assets also means that predicting the appropriate provision in a pre-nuptial agreement becomes more difficult. If UK asset values plummet in the future, the payer may find the terms of a pre-nuptial agreement either unaffordable or, at the very least, far greater in real terms than they had bargained for. On the other hand, the discounted value of UK-based assets caused by the devaluation in the pound since the referendum offers significant value for foreign investors who will now get about twenty percent more bang for their buck. This may itself see an increase in the numbers of internationally wealthy individuals relocating to the UK with their families, or at least having a significant marital base here. This could unwittingly expose some of them to the English matrimonial law jurisdiction in the event their marriages later break down.