Post-Nuptial Agreements

A couple who are already married or in a civil partnership may decide to enter into an agreement that shows what they intend to happen to their money and property if their marriage or civil partnership were to end. This is called a post-nuptial agreement.

This may be because they didn’t enter into a pre-nuptial agreement before getting married, or if there has been a separation followed by a reconciliation.

A post-nuptial agreement might be particularly beneficial where:

• one of you has substantially greater assets or income than the other

• one or both of you wishes to protect assets you owned prior to the marriage, including inheritances, businesses or family trusts

• one or both of you has children from a previous marriage or relationship and wishes to protect assets for the purposes of inheritance planning

In England and Wales post-nuptial agreements are not strictly binding in the event of a later divorce, but the terms of a post-nuptial agreement may be decisive in the event of a dispute dealt with by the court unless the effect of the agreement would be unfair. It is not possible in this country to have a fully binding marital or civil partnership agreement about what will happen on divorce or dissolution. In other countries, post-nuptial agreements may be binding provided certain requirements are met.

To improve the prospect that the court will not consider the agreement to be unfair if it is necessary to rely on it, both of you will need to set out your financial circumstances in full (called financial disclosure), and take independent legal advice on the agreement and its effects.

Agreements are generally less likely to be considered to be unfair if they are recent or if circumstances have not changed since and if both people knew exactly what they were agreeing when the agreement was made, both legally and financially, without undue pressure being applied. For this reason, properly negotiated post-nuptial agreements are most likely to be upheld by the court on divorce. It is common to build in provision for the agreement to be reviewed, either after a period of time has elapsed or when a specified ‘trigger’ event occurs, for example the birth of a child, or if either you or your spouse were to have health issues that impact on your earning capacity.

It is possible that the court might uphold part of an agreement while considering a different part to have an unfair effect.

Even though post-nuptial agreements are not always binding, you should not enter into a post-nuptial agreement unless you intend to be bound by the terms of that agreement.

If you would like further information about post-nuptial agreements please contact us and we will be happy to assist you.

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