A Royal Pre-Nup?

According to The Sunday Times 'Rich List', Prince William already has a fortune of £28 million.  His inheritance prospects must also be regarded as substantial.

As a result of the Radmacher Judgement given by the House of Lords in October, it seems inconceivable that the Prince will not be advised to enter into an Pre-Nuptial agreement so that, in the event that the marriage were to break down, in the future, his wife’s claims would be limited to her entitlement to have her reasonable requirements met,  precluding any claim to a percentage of existing or future inherited wealth.  Furthermore, it may be possible to agree in advance a mechanism as to how those needs would be assessed based upon the standard of living during the marriage rather than following subsequent litigation.

One of the many advantages of Pre-Nuptial Agreements is that their very existence can be the subject of a confidentiality clause within the agreement itself.  Furthermore, it is perfectly possible to enter into a collateral confidentiality agreement before negotiations even start so that any financial disclosure provided in the negotiations leading up the agreement remains confidential, whether the agreement is finalised or not.

Among the three most important categories of circumstances in which the House of Lords said it might not be fair to hold parties to Pre-Nuptial Agreement were where the Agreement failed to reflect the sharing principle. 

The House of Lords also said that Agreements might not be upheld if there had been a change of circumstances which made it fair to depart from the Agreement.

In these two aspects a Pre-Nuptial Agreement entered into by the second-in-line to the throne is possibly less likely to be departed from by the Court than the rest of us.

So far as the sharing principle is concerned, one envisages that most of Prince William’s existing and future wealth will be inherited rather than acquired through joint efforts and therefore less vulnerable to the application of the sharing principles.

Barring a dramatic constitutional change or revolutionary alteration to the tax regime, it is difficult to envisage an individual who is less likely to suffer an unforeseen significant change in circumstances than Prince William.  A switch of career seems unlikely as do, in the longer term, changes in the family’s place (or places) of residence.

In order to minimise the possibility that any agreement was set aside by the courts, it would be desirable for Miss Middleton to receive independent legal advice on its terms and for her to consider what fair provision for her circumstances might be in the event of divorce, rather than simply accepting whatever proposals are made to her.  I am sure that this is the very last thing on her mind in the present circumstances.  This remains the biggest obstacle to the wider adoption of Pre-Nuptial Agreements in this country at the moment as they are still seen as unromantic and as evidencing distrust, rather than the norm.

It may not, however following the Radmacher case, be necessary for Prince William to give his bride-to-be detailed disclosure of his financial assets.  An indication that he possesses substantial wealth sufficient to meet her and any children’s needs may be enough.