Pre and postnuptial agreements continue to divide opinions with many critics labelling them as unromantic, arguing that their utilisation indicates a couple’s lack of faith in the longevity of their marriage.
However, for many couples, these types of marital agreement can remedy feelings of financial unease, allowing the relationship to blossom without the constant fear of financial instability hanging over their heads.
Unlike prenuptial agreements, which must be established in the weeks and months prior to a marriage, postnuptial agreements can be implemented afterwards – in some cases, this can be years later as there is no strict time limit for when it can be agreed.
Despite their growing popularity, many individuals are still unfamiliar with postnuptial agreements and the vital role they play in protecting assets during divorce proceedings. In this article, we will address some of our clients’ most frequently asked questions in relation to these agreements.
Why choose a postnuptial agreement?
There are a number of reasons why couples seek to establish postnuptial agreements, and contrary to what some people might think, it’s not because they are expecting the relationship to break down. In most cases, both parties are fully committed to the marriage, but they want a ‘what if’ plan to add a layer of financial protection.
There are some couples that never got round to implementing a prenuptial agreement, despite their best intentions, and are taking the postnuptial route to iron out any financial considerations that existed before they exchanged vows.
However, most of the time a postnuptial agreement is made in response to a significant life event. For example, if a spouse is expecting a large inheritance then they may want to work out who’s entitled to the money if they separate – the specifics of which can be detailed within the agreement.
Another common scenario is where one of the spouse’s parents gave the couple a significant amount of money to purchase a home, after the marriage. In order to protect this investment, a postnuptial agreement can stipulate how the funds should be recuperated in the event of a divorce.
For those couples trying to rebuild a relationship following a dispute, postnuptial agreements help to relieve pressure from the situation, allowing both parties to focus on resolving relationship issues, knowing there is a backup plan in place if its unsalvageable.
What are the requirements of a postnuptial agreement?
Although they are not classed as absolutely binding in England and Wales, postnuptial agreements have become a reliable means of protecting assets, as long as certain guidelines are followed.
In fact, compared to prenuptial agreements, there is an even stronger presumption that postnuptial agreements can be relied upon as there is no need for either party to enter into one, as it was clearly not a condition attached to getting married. As with all contracts, neither party should be subject to duress or undue influence, as these sort of issues can render the agreement void.
Another key requirement is that both parties seek independent legal advice, ensuring they receive the support needed to establish an agreement. The couple must also make a full disclosure of assets and property before an agreement can be reached, as failing to do so can look like an attempt to deceive the court.
Finally, all the outlined provisions must be ‘fair’ and must have been accepted of an individual’s own free will. The Supreme Court’s guidance on what constitutes fairness focuses on three main considerations, including need, compensation and sharing. For example, both parties’ housing and financial requirements must be accounted for, so the agreement cannot interfere with this.
What does a postnuptial agreement cover?
As a bespoke contract that has been drawn up based on the unique circumstances of the relationship, a postnuptial agreement can cover almost anything you want it to. That being said, it is best practice to check with a lawyer first to ensure certain provisions are enforceable.
There are a wide range of things that couples can include and make provisions for as part of their agreement, some involving matrimonial assets and others covering logistical arrangements. This list includes, but is not limited to:
- What will happen to the family home?
- What will happen to any properties inherited during the marriage?
- What will happen to money held in joint accounts?
- What will happen to saved money that has been earned during the marriage?
- How will pensions and outstanding debts be treated?
- What arrangements should be made if either spouse dies during a marriage and does this require a Will?
As previously stated, couples have the freedom to adapt or adjust terms to suit their specific needs and the scope for potential provisions is not limited to the list above. However, the court reserves the right to consider financial issues during divorce proceedings, so it is not possible to make an agreement that restricts financial provision for either party or children.
are postnuptial agreements enforceable?
In the UK, postnuptial agreements are not automatically legally binding. However, courts are increasingly recognizing their validity, as long as certain conditions are met. Your postnuptial agreement must contain full financial disclosure from both parties, it must be fair for both of you, you must have both received independent legal advice and there must be no coercion to sign.
If you agreement has been written up with the help of a family law solicitor it is more likely to be upheld if a divorce was to occur.
Seek legal support at the outset…
Although you may feel confident that nothing will ever go wrong in your marriage, sometimes having an agreement in place offers a peace of mind that everything has been accounted for should the unthinkable happen.
If you have children, a postnuptial agreement will ensure your finances are organised in a way that protects their wellbeing, paving the way for life to continue through a fair and logical division of matrimonial assets.
Above all else, it will help relieve a lot of stress and hassle in the event of a relationship break down, as a pre-agreed strategy can be followed, allowing both parties to move forward amicably.
If you’d like professional support establishing a postnuptial agreement, then contact our in-house family law team for advice.
