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Getting hitched? - Don`t do a "McCartney"
Recent weeks have seen the papers full of pictures of a rather glum looking Heather Mills, accompanied by stories of her being ostracized by the McCartney clan. But what of Sir Paul? Life isn`t too peachy for him either, suffering ridicule from the press who have been gleefully pointing out that the separation came just before his 64th birthday which must be painfully ironic for the author of those immortal Beatles lyrics, "Will you still need me, will you still feed me, when Im 64".
Aside from the media mockery, Mr McCartney also faces a bit of a hit in his allegedly 800 million wallet, even if his marriage to Ms Mills has been rather short lived. And it seems that he will now have to go tail between his legs to his lawyers for help, as he reportedly turned down a pre marriage offer by his wife to sign a pre-nuptial agreement.
Following the recent House of Lords` decisions in the landmark cases of Miller v Miller, and Mcfarlane v Mcfarlane, it seems that pre-nuptial agreements may well become more popular.
In Mrs Miller`s case, she was allowed to keep a 5 million award after her three year, childless marriage to multimillionaire fund manager, Alan Miller, collapsed after he had an affair. The Court of Appeal had earlier said that Mrs Miller`s expectation that she should enjoy a long and affluent marriage was only ended by her husbands adultery. So, not a bad share in the circumstances and good news for Heather Mills. Not so good news for Sir Paul, however.
On the other hand, Mrs Miller`s payout seems rather less impressive when described as only about one sixth of the total pot. Although the House of Lords didn`t reduce the payment to Mrs Miller, they did point out that fairness does not require consideration of the parties` conduct and instead concentrated on the standard of living enjoyed and the amount of wealth accrued during the marriage, in working out what was a fair settlement.
For Sir Paul, this is a very significant point, as he should be able to successfully argue that the vast majority of his assets were accrued prior to the marriage, although the fact that he and Heather Mills do have a young child together will clearly impact upon the level of settlement she will ultimately receive.
In the Mcfarlane case, Mrs Mcfarlane had been married to a senior tax partner at accountancy firm Deloitte & Touche, who was earning more than £750,000 a year. They were married for 18 years and she gave up her own high flying career in the law to raise three children. The House of Lords agreed with Mrs Mcfarlane that she should be entitled to £250,000 a year for life, scrapping a five year limit imposed by the Court of Appeal. The House of Lords acknowledged that marriage is a partnership and considered that Mrs Mcfarlane`s contribution to the marriage, in terms of sacrificing her own career, warranted proper compensation.
What can be taken from the Macfarlane case, therefore, is that whereas financial needs were previously the main consideration for stay at home spouses, their contribution to the marriage - and compensation for giving up their own career - will now be taken into account to a much greater extent.
For those embarking on the journey of marriage this is a salutary tale, and in view of the acres of news coverage devoted to the issue, many couples may be persuaded to introduce a note of pragmatism into their romance and consider a prenuptial agreement - especially as it`s not just the handful of big money cases that this impacts upon.
Although the judges in Miller and Mcfarlane were careful to say that their judgment was mainly reserved for cases where there is a surplus of wealth, they nevertheless introduced the notion of compensation - which must surely equally apply to medium asset cases. Some spouses may have given up their careers around the time of their first born and returned to work only when the youngest was in secondary school. Their career will clearly suffer on a long term basis because of the decision made within the marriage partnership for that party to give up work to raise the children.
Pre-nuptial agreements are not (yet) binding on the English courts, although judges have been giving them increasing weight and recognition in recent times.
In the case of K v K (Ancillary Relief: Pre-nuptial Agreement) [2003] 1 FLR 120, for example, the Court largely held a wife to the terms of a pre-nuptial agreement. The husband had assets of £25 million and had not wanted to get married after his model girlfriend, who had trust assets of £1 million, became pregnant. Each party received separate legal advice before signing and their respective solicitors knew that the wife was expecting. The 28 year old wife, who separated from her husband after only 14 months of marriage, was awarded a lump sum of £120,000, in line with the pre-nuptial agreement, rather than the £1.6m she had claimed. The judge treated the couples` decision to sign an agreement as conduct that it would be inequitable to disregard.
Neither the Miller nor McFarlane marriages had prenuptial agreements in place. In the Millers short, childless marriage, the existence of a prenuptial agreement could have made a big difference to Mr Miller. Had one existed, then the process to determine the distribution of assets may have been substantially different. With the Mcfarlanes, however, given the long length of the marriage and the fact that children were involved, it is fair to assume that a prenuptial agreement might have been largely ignored.
Nevertheless, the combined effect of the two cases will surely be to result in a pressing demand for further use and recognition of pre-nuptial agreements. At the moment in the English Courts, especially when children are not involved, judges will regard pre-nuptial agreements as a guide to the couple`s original intentions of splitting assets in the event of a divorce, but they are not bound to follow them to the letter. Despite this, if both parties have willingly entered into the agreement after having made the requisite disclosure and having received appropriate legal advice, then there may be little reason to depart from its terms.
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