One of the biggest impacts of the pandemic has been the increased pressure placed upon relationships and 2020 saw the biggest percentage rise in divorce rates since 1972. Historically, more...
Prenuptial and postnuptial agreements
If you are planning your wedding, you’ll already know that there’s a lot of preparation involved. However, you may not have included getting a prenuptial agreement on your to-do list.
A prenuptial agreement is a legal document that is designed to make things easier to sort out if the marriage breaks down and can, in fact, strengthen your marriage by:
- Protecting any pre-existing fortune from being split
- Protecting a spouse from their partner’s debt
- Providing for children from a previous relationship
- Keeping family property within the family
- Helping prevent solicitor fees from mounting up
A prenuptial agreement is recognised in the UK, although judges have the discretion to depart from it, especially if it is considered unfair to any children of the marriage.
Money is a common cause of stress in relationships. The terms of a pre-nuptial agreement can help by clearly outlining your approach to handling your finances in advance. It means that many financial issues have already been agreed upon, such school fees and how any inheritance should be handled. Deciding these financial arrangements in advance could help prevent future arguments that could lead to a divorce.
Pre-nuptial agreements can provide peace of mind, and they may be especially relevant if:
- You have built up a business and do not wish to sell it if you do divorce
- You want to ensure that children from any previous relationship will not lose any inheritance rights
- You have, or are likely to inherit, a family home that you want to keep in the family
A prenuptial agreement can also include a ‘debt clause’ to protect you from being liable for that debt.
To comply with the law, a prenuptial agreement should be drawn up by a qualified lawyer. There is no ‘one-size fits all’ solution so it is a good idea to speak to a family law specialist with expert knowledge and understanding of this niche area who can effectively meet your specific needs.
In most cases, a prenuptial agreement will list all the assets of both partners and how they will be handled in the event of a divorce. Both parties must fully disclose all assets and property and they will need to confirm that they voluntarily agree to the prenuptial arrangements. You and your partner will need to use separate solicitors, and the agreement should be signed at least 28 days before the marriage.
Your pre-nuptial agreement can be changed at any time, providing both parties agree to this. Alternatively, if you are already married, then a postnuptial agreement may be a viable option and can be entered into at any time.
Postnuptial agreements only differ from prenuptial agreements in that they can be made at any point after the marriage has taken place.
Although they cannot side-step the authority of the Court, postnuptial agreements have become more persuasive in financial proceedings when the share of the assets is disputed. Providing you and your partner had independent legal advice, gave full and frank financial disclosure, and the document was drawn up and executed correctly, then the agreement will likely be taken into account by the Court.
Postnuptial agreements can be more influential than prenuptial agreements. They must fulfil the same criteria as prenuptial agreements in order to be valid, and it must be very clear that neither party signed the document under duress. You should ensure that the document has proper financial provision for any children. As with prenuptial agreements, postnuptial agreements should also allow for periodical reviews for changes in circumstances, such as the birth of children, illness and change in employment status etc.
If you are considering a postnuptial agreement, then it’s important to agree on your objectives so that neither of you will be significantly disadvantaged financially as a result of it. Hence there is a need to provide financial disclosure and take independent legal advice upon the content of the agreement.
While postnuptial agreements are not automatically legally binding, if you are signing one, you should expect that it will be. It may be difficult to persuade the Court otherwise in the event that matters get that far.
However, if all the necessary elements are in place, with specialist legal advice, a postnuptial agreement can give divorcing couples a quick, efficient and inexpensive resolution to their financial settlement, as opposed to 12-18 months in Court with an outcome that cannot be predicted.
There are many positives in having such an agreement:
- They are helpful when significant family wealth (for example, a farming background) is brought into the marriage
- They can help to openly express any issues and resolve issues that might otherwise linger
- They can save time and money and protect both parties for the long-term
It is accepted however that such agreements need to be handled delicately as it is may not be an easy discussion to have with your current or future spouse. They should however be viewed and dealt with in a collaborative way, where the parties and their respective lawyers work together to achieve a mutually acceptable outcome.