In our increasingly cosmopolitan society it is not sufficient to simply sign up to a PNA prior to marriage and then consign it to a dusty drawer, hoping that it will not be looked at again. It is important to consider whether or not that agreement needs review further down the line and, in particular, it is important to consider the enforceability of an agreement in the event the parties move to a different jurisdiction. This could happen for a number of reasons and not just because one (or both) of the parties to the marriage might wish to return from England to the country of their birth. Increasingly commonplace is when a married couple move to another country for a new (and often exciting) employment opportunity. They may then choose to settle in that jurisdiction, have children there and one of the spouses may cease employment to care for the children instead. In a very short space of time, the parties’ matrix can radically change and we must ensure that such possibilities are within the scope of a document which may have been drafted several years earlier.
Is it easy to have an international PNA?
In short no. It is not currently possible to have a global agreement which would be enforceable worldwide. In the USA matrimonial law varies on a state by state basis. In Europe most countries have a matrimonial property regime system that will apply. In England PNAs are not, strictly speaking, legally binding but provided that certain safeguards have been met they are likely to be upheld. Translating what a couple wants to achieve with a PNA across jurisdictions can be complex. If for example, you had an American marrying an Italian based in London, both with assets in their respective jurisdictions, it would be important to consider the effect of the PNA in Italy and the relevant American state where the assets were held.
What are the relevant considerations?
Increasingly more and more families are international and will have assets or properties in more than one jurisdiction. Matrimonial laws differ from jurisdiction to jurisdiction and the legal principles that apply in one country may differ vastly from another. Whilst the European style matrimonial property regimes are well established and routinely enforced, the situation in England remains more nuanced with the court still retaining ultimate discretion (although if certain safeguards are met the PNA is likely to be upheld.) All of this reveals the complexities involved in having a PNA that will be upheld in the relevant country where the parties ultimately seek to resolve the dissolution of their marriage.
In England it is not possible to bind the jurisdiction of the court by signing a PNA. However, the courts are likely to uphold an agreement that is considered to be fair. Typically an agreement will be considered fair if:
- Both parties have had independent legal advice;
- There has been financial disclosure;
- The terms are fair and provide for the parties’ needs to be met in the event of a dissolution of the marriage;
- There was no undue pressure to sign the agreement;
- There was no relevant fraud or misrepresentation; and
- The agreement is properly executed as a deed.
Whilst these considerations are factors that the court will take into account, failing to comply with one or more of these factors will not necessarily be fatal. For example in Versteegh v Vertsteegh [2018] EWCA 1050 the Court of Appeal determined that if there is a simple PNA drafted in a country where such agreements are commonplace and generally without legal advice and without disclosure then the court should not add a gloss to the effect that a spouse will not understand the implications of the agreement without legal advice to the effect that they might live somewhere that operates a discretionary system (as in England). It would be unrealistic to expect them to take advice in each separate new country. Conversely, in AH v PH [2013] EWHC 3873 the wife was found to have not fully understood the implications of a Scandinavian PNA and the court found that she should not be held to it – at the time the parties were resident in England and did not seek English legal advice on the agreement.
In CMX v EJX [2022] EWFC 136 the court considered a French separation de biens agreement (a separate property regime). The wife tried to argue that she had not fully understood the agreement and had not had independent legal advice or disclosure. The husband counter-argued that there had been a notary who explained the agreement to them both and that was the way things were routinely dealt with in France. The agreement would be upheld in France and the English Court would not simply disregard it.
A key consideration when preparing a PNA is therefore what jurisdiction will govern the PNA. Typically, a PNA should be drafted to comply with the rules of the country with which the couple have the strongest bonds. Although this is not necessarily determinative, for example a South African couple, moving to Hong Kong from London may still choose to prepare an English PNA in anticipation of their marriage. This is a subjective determination and will depend on many matters for example, where each of them are domiciled, where they intend to reside and where the primary assets are based. It is usually logical to draft the PNA based on where the parties intend to live initially following the marriage ceremony.
In the event that a PNA is prepared and signed in England but there is another relevant jurisdiction in the mix then the key consideration will be the enforceability of the PNA in the foreign jurisdiction. It may be advisable to have a mirror agreement – containing the same terms but signed in the foreign jurisdiction to maximise the chances of it being enforced in either place. This requires advice to be taken in the second jurisdiction and for the lawyers to work together to understand how the law differs in the respective jurisdictions. At Payne Hicks Beach we frequently work with overseas lawyers and are able to do so through our connections with the International Academy of Family Lawyers. In some circumstances it may be necessary to engage lawyers in more than one foreign country.
Another consideration is where a couple marry and agree a PNA overseas but subsequently move to England. In these circumstances it may well be in their interests to sign up to a post nuptial agreement reflecting their earlier agreement. It is also important to note that even if the parties sign an agreement overseas and then subsequently move to England the court will consider the agreement and what the parties intended by entering into as one of the circumstances of the case. However, the court would only follow the agreement if the terms were considered fair by the considerations set out in English law. If a judge considers that the agreement does not abide by the principle of fairness or would leave one party in a predicament of real need then they may choose to depart from it.
There are also practical considerations that may need to be factored in. For example, whilst a same sex couple can enter into a PNA in England there are some countries which do not recognise same sex marriages and would not uphold the agreement.
Conclusion
If you are considering entering into a PNA prior to a wedding, our advice is to seek legal advice early. If there is an international dimension it may be necessary to appoint a lawyer in the foreign jurisdiction to advise on the applicable regime in the foreign country and also on the enforceability of an agreement. Leaving plenty of time to determine how best to proceed is essential. There will be negotiations over the terms of the agreement, the drafting and inevitably the costs of preparing the agreement will be higher than for a conventional English PNA. If there is a question mark over where a couple will live during the marriage then it may be sensible to build in a review clause for the PNA to be re-considered in the event of an overseas move.
For further information, please contact Victoria Hingston or Kelly Gerrard, Partner and Legal Director respectively in the Family Department or your usual contact in the Family Department or, alternatively, telephone on 020 7465 4300.
