Expensive Purchases in Prenups: Joint or Sole Property?

Lisa Pepper

Prenuptial agreements: are expensive purchases joint or sole property?

The experienced family lawyers at Osbornes Law advise wealthy and high net worth individuals on the terms of prenups; and on separation and divorce.

While a prenuptial agreement cannot cover every eventuality, clients should at least consider providing for the likely scenarios to avoid the risk of dispute. A new ruling [Loh v Loh-Gronager [2024] EWFC 241] comes after a prenup anticipated the parties’ joint accounts being used for household expenses – but not the funding of expensive items to furnish the matrimonial property.

Who, then, owned those items?

What happened in Loh v Loh-Gronager [2024] EWFC 241]?

The parties married in October 2019 and separated in May 2023. The Wife (‘W’) called Wei-Lyn Loh, 41, was hugely wealthy – the majority of her wealth comprising business assets. She was also the beneficiary of a family trust.

The Husband (‘H’) – Ardal Loh-Gronager, 33, was also wealthy. He was formerly a banker before leaving in 2018 to renovate their substantial home in North London.

The parties entered into a prenup seven months before their marriage. The agreement defined ‘joint property’ as property in which legal title was held in both their names. It also recorded that the parties’ joint bank account “will be regarded as Joint Property irrespective of the contributions either [party] make to it from time to time” and would be used to “cover all utility bills and general household expenses at the Matrimonial Home and also both parties’ day to day living expenses”

During the marriage, W had spent millions of pounds on items (‘chattels’) to furnish the matrimonial home during the marriage, using funds from their two joint accounts.

It was not disputed that W was the sole legal owner of the items she had purchased. W had also funded similar purchases from her own personal bank accounts which H had facilitated, but there was no dispute about the ownership of those items either.

What is classified as joint property?

The issue in dispute which the court had to decide was whether the items paid for out of the joint accounts were to be classified as ‘joint property’, irrespective of each party’s contributions to the funds in the accounts (in which case H would be entitled to a share); or whether the items should be divided according to their respective contributions (in which case W would take more).

H argued that all the cash W had paid into the joint accounts had become their joint property, therefore any purchases made with those funds must be treated as if each had contributed equally.

However, the Judge accepted W’s argument that they were not ‘jointly acquired’, given that one account-holder is entirely free to buy items with funds from a joint account. A further factor was that the joint account included substantial funds transferred from accounts that were previously her own separate property.

The Judge decided that where cash in their joint account was used to fund purchases solely in W’s name, H derived no financial interest in it (unless he made an actual financial contribution to it). The chattels were not, therefore, jointly acquired.

H was not entitled under the terms of the prenup to any interest in the items purchased by W – those items were her separate property.

The need for clarity

The decision reinforces the distinction between solely-owned and joint chattels and property, and the relevance of the parties’ respective financial contributions.

Importantly, the Judge noted that the parties had intended the prenup to be a clear account of their intentions going forward in respect of the joint accounts. But in practice, their use of the accounts was expanded beyond the stated household bills and living expenses stated in the prenup.

The prenup did not anticipate the joint accounts being used to purchase valuable chattels – an expensive omission.

How we can help

Anyone who is considering the terms of a prenup, or has concerns as to how an existing prenup could impact the division of property on divorce should seek expert legal advice.

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