Protecting & passing on wealth

Publish date

14 August 2020

FAQ: Prenuptial and postnuptial agreements

What is a nuptial agreement?

A nuptial agreement is a written agreement between the two parties to a marriage governing, among other things, how assets should be divided upon divorce and how the parties’ finances should be managed throughout the course of the marriage or civil partnership.

Are nuptial agreements legally binding in England and Wales?

Strictly speaking nuptial agreements are not enforceable in the same way as a valid contract is in civil matters.  However, since the landmark case of Radmacher and Granatino in 2010, the court will give effect to a nuptial agreement that is freely entered in to by both parties with a full appreciation of its implications unless it would not be fair to hold the parties to their agreement.

Following that guidance, this means that there should generally be full disclosure when entering into a nuptial agreement so that there is transparency, both parties will need to obtain independent advice so that they are in an equal bargaining position and the agreement should be entered into sufficiently in advance of the wedding so that there is no undue pressure.

Whilst either party will always have the option on divorce to make an application to the court to deal with their financial arrangements, a valid prenuptial agreement will likely be upheld so long as it makes sufficient provision to meet both parties’ needs.

What to include in a prenuptial agreement?

Many parties intending to marry may wish to protect assets they acquired before, and even after, their marriage to their current partner. These may include for example, properties, savings, inheritances, gifts, shares, business interests and so on. These assets are referred to as being that party’s “separate” property.

A properly drafted prenuptial agreement will seek to (and often does) protect a party’s separate property, in the event of the breakdown of the marriage. The parties should ensure that they each obtain separate independent legal advice, that they provide each other with full financial disclosure and are not put under undue pressure to sign the agreement. However, even a well draft prenuptial agreement is always subject to the jurisdiction of the court. This means that after taking all matters into consideration, if a judge feels that one party’s income or capital “needs” have not be met by the terms of the agreement (especially in long marriages or if there are children), he or she can refuse to enforce some or all of the terms. This is why it is important to obtain proper legal advice from a suitably experienced family law solicitor.

Can nuptial agreements be used for civil partnerships as well as marriage?

Yes.  A civil partnership in England and Wales has the same legal status as a marriage and the same rules relating to nuptial agreements apply to both.

Can a nuptial agreement leave one party with nothing in the event of a divorce?

No.  As set out above, a nuptial agreement will only usually be upheld to the extent that it does not leave either party in a position of real need.  With that said, a well drafted prenuptial agreement can offer significant protection to the parties’ respective assets.

What is the difference between prenuptial agreements and postnuptial agreements?

At its simplest, a prenuptial agreement is a nuptial agreement prepared and signed in advance of the marriage whereas a postnuptial agreement is prepared and signed after the marriage.

Historically the two have been treated differently by the courts, but they are now seen as equally valid types of agreement.   However, there are some different factors to be considered in each case to ensure that the agreement in question is as strong as possible.   In particular, prenuptial agreements should be signed at least one month before the date of the marriage to avoid future concerns that an immanent wedding put pressure on either party to sign. Postnuptial agreements do not have this time sensitivity.

When should I discuss the possibility of a prenuptial agreement?

As mentioned above, prenuptial agreements do have a time sensitivity to them that is not relevant in post nuptial settlements because prenuptial agreements should generally be signed at least one month before the wedding.  We would also suggest that parties will usually be preoccupied enough in the final build up to a wedding without adding discussions over a prenuptial agreement in to the mix.

We would therefore advise that parties wishing to enter in to a prenuptial agreement should begin discussing this as soon as possible and should seek legal advice early on in the process to help guide their expectations.

Can a nuptial agreement be varied throughout the course of the marriage?

Yes, this can be done by agreement between the parties.  Most nuptial agreements contain an explicit review clause listing certain key events that may trigger a review.  Even without such a clause it would be possible for the parties to voluntarily decide that they wanted to alter the terms of an agreement.  Where parties do decide to alter the terms of a nuptial agreement they should obtain legal advice to ensure that the correct procedure is followed.  Usually the original agreement will be upheld  if a court decides it satisfies the requirements (re legal advice, disclosure etc) when signed and that  the proposed provision is  fair to both  taking into account all the current circumstances including the agreement, in the event that a review is not carried out or agreed.

Will a nuptial agreement be damaging for our relationship?

Some may think that a nuptial agreement demonstrates a bad mind-set or a lack of trust between the parties.   However, research suggests that arguments about money and a lack of clear communication in this regards is one of the main reasons relationships breakdown.  Having a clear agreement over financial arrangements can therefore help to strengthen a relationship rather than undermining it.

Why should I consider a having a nuptial agreement?

Common advice is to identify particular circumstances which might prompt an individual to consider a nuptial agreement.  Such circumstances include:

  • Where one or both parties are likely to receive a significant capital gift or inheritance
  • Where one or both parties have acquired significant assets prior to the marriage and are bringing these “pre-marital” assets to the marriage
  • Where the parties are marrying in later life (particularly if they have children from previous relationships)
  • Where a party has received a large personal injury or clinical negligence award to help them meet their ongoing needs resulting from their injury.

However, there is an argument that nuptial agreements can have much wider benefits and should not be limited to just these specific facts.  Contested divorce proceedings are an expensive process.  This means that a nuptial agreement can pay dividends in the long run in terms of the money it might save in contested proceedings which will invariably cost many times the total cost of nuptial agreement.

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