A recent High Court decision over a banker and heiress’s multimillion-pound divorce is a reminder that prenuptial agreements aren’t bulletproof.

A recent case serves as a crucial reminder that prenuptial agreements, while persuasive, have never offered concrete certainty in divorce proceedings.

The case concerns a City banker who drained funds from a joint marital account to finance an affair and lost approximately £4m despite having a prenup in place.

while prenups can carry weight in English law, they are not a free pass for financial misconduct during marriage.

The £4m Prenup Lesson

Ardal Loh-Gronager, a former Goldman Sachs banker, married Wei-Lyn Loh, described as an ‘enormously wealthy’ businesswoman and heiress, in 2019. Their prenuptial agreement entitled him to receive nearly £6.5m upon divorce. Though, Mr Justice Cusworth slashed this payout by around £4m after finding that Loh-Gronager had systematically misused joint marital funds.

The judgment revealed that the husband made regular payments to his mistress, disguising them as expenditure on ‘flowers’. He transferred £1m on the day his wife was undergoing therapy. He also allowed his mistress to use a Bentley that his wife had gifted him before their marriage.

“Financial cheating” describes dishonesty in relationships regarding financial matters. Using joint money without transparency, disguising payments, and treating marital assets as personal spending accounts were punished by the courts. The judge found that Loh-Gronager had been “doctoring” emails and preparing for a “lucrative separation”.

Conduct Still Matters

There’s a misconception surrounding prenups. This ruling exemplifies that agreements cannot protect bad behaviour. Many believe that a properly drafted and executed agreement renders conduct during marriage irrelevant. This represents not the case.

Prenups support manage risk and provide certainty about financial outcomes. However, English courts retain discretion to deviate from prenuptial agreements where fairness demands it. Financial misconduct, lack of transparency, and behaviour intended to disadvantage a spouse can justify departures from agreed terms.

With current tax pressures on family wealth, courts may place even more emphasis on conduct.

conduct still matters, disclosure is essential, and fairness prevails. A prenup is a valuable tool, but it cannot shield financial misconduct.