Divorces and dissolutions are inherently stressful and emotionally charged, particularly when they involve high-net-worth individuals. While the overall divorce rate in England and Wales has fallen in recent years, the financial stakes for wealthier couples remain high.
A report by the Office for National Statistics found that the wealthiest 10% of households in Great Britain hold average assets of over £1.2 million in total wealth, with 38% in property and 36% in private pensions.
For high-net-worth couples, these complex assets, ranging from business interests and overseas investments to valuable property portfolios, can make asset division upon separation particularly complex.
This is where a carefully drafted prenuptial agreement can make a significant difference, providing clarity and protection for both parties during the marriage.
We’ll cover why a prenup for high-net-worth couples is an important step below, as well as how working with a specialist solicitor can help ensure the agreement is fair and tailored to your circumstances.
Why High Net Worth Individuals Are Choosing Prenups
A prenuptial agreement goes beyond a simple legal document; it serves as a strategic tool for several key reasons.
1. Protecting Inherited Wealth
For high-net-worth individuals, protecting inherited wealth is a key reason for choosing a prenuptial agreement.
In the UK, the value of inheritances is expected to double over the next 20 years, highlighting the growing financial stakes for families with significant assets.
A prenup provides a formal method of protecting these assets, ensuring that family money, heirlooms, or future inheritances remain within the family and are distributed according to your wishes.
It can also provide clarity for both parties by defining what constitutes inherited wealth versus assets acquired jointly during the marriage. This helps prevent disputes and protect family legacies in the future.
For high-net-worth individuals, this ensures their wealth is managed and preserved in accordance with their intentions.
2. Clarity and Certainty
For high-net-worth couples, financial affairs often encompass multiple properties, investments, trusts, pensions, and business interests. Research indicates that disputes are more prevalent among individuals with complex asset portfolios.
In fact, in 2024, contested financial remedy orders in the UK surged by 66%, reaching the highest level since 2008. This highlights how even sophisticated financial portfolios can become the source of disagreement, underlining the importance of clarifying arrangements before marriage.
A prenuptial agreement provides clarity by clearly outlining financial arrangements and expectations from the outset. This transparency reduces uncertainty and ensures both parties understand their rights and obligations, creating a stronger foundation for the marriage.
3. Property Portfolios
Property often represents one of the most valuable and complex components of a high-net-worth couple’s wealth. This can include domestic residences, investment properties, commercial real estate, and overseas holdings.
Even if individual properties are not exceptionally high in value, the combined portfolio can represent a substantial portion of total assets, making clear agreements essential in the event of a divorce.
A prenuptial agreement allows property portfolios to be formally ringfenced, ensuring ownership and equity remain with the original owner and are defined clearly. This reduces the risk of disputes over income, capital gains, or the sale of properties.
For overseas holdings, a prenup can also address jurisdictional issues, inheritance laws, and local tax responsibilities, providing additional layers of protection.
4. Business Interests and Investments
A prenuptial agreement offers high-net-worth couples a strategic way to protect business interests and investment portfolios, which often represent a significant portion of their combined wealth.
It can set the value of a business at the outset of the marriage, ensuring that only growth or gains accrued during the marriage are considered in any future division.
The agreement can also outline how the business will be valued in the event of a divorce, whether assets acquired later, like strategic investments, are included, and how appreciation or depreciation should be accounted for.
A prenup can also clarify how income generated by the business or investments will be treated, define the roles and responsibilities of spouses involved in the enterprise, and support succession planning to safeguard continuity.
How A Solicitor Can Help With High Net Worth Prenups
While a prenuptial agreement provides clarity and protection, it is important to understand that in England and Wales, prenups are not automatically legally binding. This means that during a high-net-worth divorce or dissolution, a prenup can be challenged in court.
Family and matrimonial solicitors can help address challenges that might put a prenuptial agreement at risk, such as incomplete or misleading disclosure of assets, any perceived pressure or duress during signing, or terms that could disproportionately favour one party.
If relevant, a solicitor also ensures that the agreement accounts for children. Prenuptial agreements cannot compromise a child’s entitlement, and agreements can be structured with review clauses in place to ensure that their financial needs are properly considered if they are born later.
These are areas that many individuals may not be aware of, but overlooking them could compromise the effectiveness of the agreement.
Engaging a solicitor early in the process ensures that the prenup is lawfully drafted, tailored to the couple’s specific circumstances, and structured to withstand potential challenges, providing both parties with confidence and clarity as they enter marriage.
How We Can Help
At Harding Evans, we understand that high-net-worth couples face unique challenges that make prenuptial agreements essential.
Our family and matrimonial team will work closely with you to create agreements that reflect your specific assets, inheritance, and family circumstances.
For personalised advice and support, contact a member of our Family & Matrimonial team at hello@hevans.com.
