It is reported that singer Mariah Carey and her fiancé James Packer have decided not to have a prenup. Maeve O’Higgins explains why wealthy couples are unwise to follow their lead.
Mariah Carey has been photographed wearing a massive 35 carat diamond engagement ring, estimated to be worth around $8 million and given to her by her fiancé, casino owner James Packer. Both have to arrange divorces from their existing spouses before they are able to marry, but they are reportedly not planning to sign a prenup.
It is alleged that Mariah Carey had a prenup with her estranged husband. However, it seems she does not feel one is necessary this time. Perhaps she and James Packer feel they do not need a prenup because they are both independently wealthy - although he has a lot more than her, with an estimated wealth of about $4.7 billion, compared with her estimated wealth of about $520 million.
Are they doing the right thing or would it be more sensible to tie up the loose ends with a prenup, in which they agree that neither of them will make a financial claim against the other if their intended marriage breaks down sometime in the future?
Prenuptial agreements made between couples who are both independently wealthy and therefore able to meet their financial needs comfortably out of their own resources have a strong chance of being upheld by the courts in England. This is in spite of the fact that prenups remain unenforceable (in the sense that you can't contract out of your right to go to court to make a financial claim if the marriage breaks down).
Apart from avoiding the cost and emotional distress of an ugly court battle over finances in the event of divorce between wealthy spouses, a prenup ‘ringfencing’ pre-acquired assets on both sides can be a useful way of demonstrating your willingness to be straightforward and transparent about money. In England a prenup necessitates both partners disclosing their respective financial circumstances to one another as part of the negotiation process for the prenup.
It can also be a useful way of protecting the financial interests of any children of the parties by previous marriages and to provide reassurance to such children.
There is another reason why a prenup may be helpful. Many couples find it difficult to discuss financial issues and have different attitudes to money, which can lead to misunderstandings and disagreements once they get married. It’s much better to explore your potential differences in relation to financial matters before you get married, which you will have to do as part of the negotiating process if you decide have a prenup. If you address such issues at an early stage of your relationship, when all is going well, hopefully this will help you to communicate effectively and negotiate over difficult issues as they arise during the marriage.
Overall, it's definitely sensible for a wealthy couple to both take separate independent legal advice at an early stage, well before their wedding day, about how a prenuptial agreement (coupled with making a new will) might be helpful, in order to avoid the possibility of an acrimonious divorce in the future - however unlikely that may seem at the present time.
Family Law Partner
This blog is intended for general information only and should not be considered as giving advice in relation to any individual case nor be taken as applying to any particular case. No liability is accepted for any such use of the information contained.