The rise of the pre-nuptial agreement continues unabated. And never more so than for young successful athletes who tick all the ‘you need an agreement’ boxes – rapid accumulation of wealth, short career spans and public interest in their private lives.
For many, a pre-nuptial agreement now sits firmly on the wedding to-do list alongside choice of venue, guest list and seating plan. No longer an awkward afterthought, a pre-nuptial agreement has become an essential and practical step to take.
The role of agents
Critical to these conversations are the sports agents who look after the talent. As part of the holistic service that most agents now provide, they have become quasi-family offices with the benefit of expert advice provided by accountants, lawyers, and other professionals.
Often the first port of call for their clients, agents routinely help initiate discussions about pre-nuptial agreements and are instrumental in getting them off the ground as they understand the value that they can add to the wealth planning, financial hygiene and reputation management of their clients.
Pre-nup protections
Once regarded as unromantic and divisive, pre-nups are a vital component in the modern wealth protection armoury, enabling couples to exercise autonomy in determining how to treat their resources during the marriage and, most importantly, in the event of separation or divorce.
Proactively taking control of the financial consequences of divorce not only reduces the risk of future costly disputes but also helps protect a sportsperson’s privacy and public image, avoiding a protracted and messy divorce from being played out at great expense in the media spotlight.
A well-drafted agreement not only often includes bespoke confidentiality provisions that can be tailored to the needs and circumstances of each couple but will also typically require the couple to resolve any disagreement through Non-Court Dispute Resolution.
Conducted privately and away from the court room, this approach avoids the public and media scrutiny to which the sportsperson in question would otherwise be exposed – a growing concern at a time when the family court is shifting towards ever greater transparency, with accredited journalists and legal bloggers regularly permitted to attend hearings and access certain documents, and the anonymisation of judgments no longer being a given.
Jurisdiction matters
The globalisation of sport and the international nature of relationships focus the spotlight even more starkly on pre-nuptial agreements. The careers and circumstances of sportspeople are frequently multi-jurisdictional, with a changing blend of nationalities, domiciles, tax residencies, assets and earnings to consider.
The recommendation for any soon-to-be married sportsperson with an ongoing link to England is to have an English pre-nup – with appropriate input from other relevant jurisdictions – not least because England is known as being generous to the financially weaker party, which makes it in turn a dangerous jurisdiction for the financially stronger party.
An international sportsperson cannot rely solely on having a pre-nuptial agreement or marriage contract in their country of origin with no input from or counterpart agreement in England.
Agents and clubs alike are acutely aware that a high-profile, toxic divorce can harm both a sportsperson’s reputation and on-field performance as well as creating broader challenges with which the club must then grapple.
There is no question that it is in the best interests of clubs to consider pre-emptively, as part of their due diligence process, whether their players are protected from such scenarios, and agents and clubs together will continue to play a key role in ensuring that their clients have the necessary tools in place to prevent them. Pre-nups agreements are fundamental to helping achieve that.
Lois Langton is head of family law and Olalla Garcia-Arreciado senior associate at Howard Kennedy LLP
