Cross-border clarity: the rise of the international prenup
Jeff Bezos is due to marry Lauren Sánchez later this year. His 2019 divorce from MacKenzie Scott, which concluded without a prenuptial agreement (“PNA”), resulted in the transfer of over $35 billion in Amazon shares. It has been reported, perhaps not surprisingly, that this second marriage is to be governed by a carefully negotiated PNA, spanning a number of jurisdictions. Whilst most reports have focussed on the scale of the wealth, arguably the more interesting aspect of this case is the international dimension (Bezos has a financial empire that spans the globe).
Cross-border relationships raise legal questions that purely domestic relationships do not. Financial interests may lie in multiple jurisdictions and there are often a number of potential legal systems that might be relevant on a subsequent divorce. When such relationships end, there is the potential for significant uncertainty and complexity – sometimes resulting in high stakes and vastly expensive cross-border litigation. A PNA can help to avoid that; such agreements in an international context are often as much about legal clarity as they are about financial protection. International PNAs demand technical precision and strategic foresight, but can bring clarity and pour oil on potentially troubled waters.
Whilst the English Court has become increasingly willing to uphold PNAs following the decision of the Supreme Court in Radmacher v Granatino in 2010, they are not contractual in nature and so are not binding. Enforceability remains discretionary and there are a number of safeguards in place that must be satisfied if a PNA is to be upheld. Most are procedural in nature - a PNA must be freely entered into and with a full appreciation of its implications (which usually requires financial disclosure and independent legal advice). However, there is also a substantive safeguard, in that an English Court will not uphold an unfair PNA, normally taken to mean a PNA that does not meet the reasonable needs of both parties.
Other jurisdictions take different approaches, often placing a greater emphasis on certainty and autonomy than the English Court. For example, in many countries in continental Europe marriage contracts are binding (without an assessment of whether they are ‘fair’ in the English sense) and are routinely entered into without financial disclosure or legal advice.
This difference in approach can generate friction when preparing and negotiating an international PNA, as the procedural and substantive legal thresholds rarely align. In many cases, a foreign PNA will not be deemed sufficiently fair by English law standards meaning it is unlikely to be upheld unless further clauses are added to address the ‘needs’ of the parties. However doing so often renders the terms of the PNA more expansive than would normally be the case in the other jurisdiction, meaning a careful balancing act needs to be undertaken when negotiating the terms.
Layered on top of this legal complexity is cultural complexity. Different jurisdictions have different perceptions of PNAs. In some jurisdictions (to include England), PNAs are a relatively new concept and there is a degree of cultural reticence to negotiating such an agreement (albeit that is changing). In contrast, in most parts of continental Europe and in the USA, PNAs (or marriage contracts) are seen as fairly routine and in some sense central to the concept of marriage.
A bespoke and often complex PNA is usually required to blend the various legal considerations and to ensure the PNA fulfils its purpose. It is crucial, therefore, for the parties to ensure that they instruct specialist international family lawyers, who have sufficient experience working in this context and balancing the unique emotional and cultural complexities. Such lawyers will often have a ‘black book’ of specialist advisors in other jurisdictions so that comprehensive advice can be taken. Domestic expertise alone is simply not sufficient for this kind of arrangement.
