As part of the Tatler SOS Experts’ Corner, we delve into the subject of legal arrangements surrounding relationships. Here, Elizabeth Hicks and Alexie Bonavia from Family Law in Partnership share advice on collaborative prenups and what they mean.
The prospect of mentioning a ‘prenup’ in the run up to a wedding can feel like a betrayal of a couple’s love and commitment to a future life together. It is natural to feel that the ‘business and legality’ of participating in a negotiated agreement is awkward and potentially one-sided.
However, the reality is that dynastic wealth and family trusts need protection. Whilst prenuptial agreements are now openly discussed in common parlance, there is still an uncomfortable feeling for many to admit to having gone through the process. This perception is slowly changing as the reality of the divorce statistics cannot be ignored.
A new phenomenon is, however, taking place within the London family law world. The so-called ‘collaborative prenup’ is becoming increasingly popular- it allows the couple to take control of the process together as opposed to relying on their respective family lawyers to drive the negotiations forward. Most people are aware of the traditional method used by family lawyers to negotiate and enter into such agreements; however, the collaborative prenup provides a refreshingly niche, modern, and exclusive way of approaching these agreements.
Protection of wealth is now being discussed in a more open and collaborative manner, giving both parties the opportunity to articulate their views in a clear and transparent way with their partner and their respective lawyers.
This new collaborative method is not, as yet, widely offered and only a handful of top London family lawyers are trained in the collaborative process. In our experience, it is most commonly used by high-net-worth and ultra-high net worth clients, whose priority is to preserve confidentiality and protect their privacy whilst also permitting the involvement of their wider team of trusted advisers (trustees, accountants, specialist financial advisers etc) in the negotiation process to provide additional guidance and direction.
The benefits of the collaborative method versus the traditional model are unequivocally clear: the process is driven entirely by the couple and not by their respective lawyers, allowing the couple to reach an agreement in a respectful (and collaborative) manner. It also tends to promote creativity (in terms of how and when the sessions take place and which specialist advisers should attend); indeed, for many couples, the process can be a cathartic experience where many important aspects of their future life and relationship together can be discussed openly addressing issues which may previously have been brushed aside or simply avoided.
Furthermore, since the collaborative process requires a series of sessions, couples are invariably more relaxed and comfortable by the time an agreement is signed as to the terms agreed and in respect of the wider implications of the agreement itself. The reality is that as the couple will have spent time and effort discussing the terms of the agreement in an open and transparent manner, there will be less opportunity for the agreement to be challenged at a future stage in the event of divorce (each session will have been properly documented and recorded).
Unsurprisingly, the wealthier spouse will be pleased to have taken steps to protect their wealth and the less wealthy spouse will also stand to benefit by having protected their own position, thereby avoiding uncertainty in the event of possible future divorce.
For these reasons, in the run up to a wedding a collaborative prenup offers an attractive and modern mechanism for dealing with the often awkward and uncomfortable discussions concerning the protection and division of wealth in the event of a future divorce.
For more gold-standard guidance on prenups visit the Tatler High Net Worth Address Book