Everything you need to know about Pre and Post Nuptial Agreements


Everything You Need To Know About Pre and Post Nuptial Agreements

Marriage is not only a union of hearts but also a legal contract that binds two individuals in a relationship of commitment and shared responsibilities. In modern marriages, where people are marrying later and are therefore bringing greater individual wealth into the relationship pre or post-nuptial agreements (nuptial agreements) provide a way of protecting property and assets should a marriage end in divorce. While nuptial agreements are not exactly romantic, they serve as practical tools to protect both parties' interests, ensure clarity, and potentially alleviate the emotional stress that often accompanies the dissolution of a marriage and the negotiation of a financial settlement.

What is a pre- or post-nuptial agreement?

A pre-nuptial agreement is a legal agreement made between two individuals before they get married. It sets out how matrimonial assets, liabilities, and financial responsibilities will be divided in the event of divorce.

Post-nuptial agreements are the same as pre-nuptial agreements, except they are made after the wedding. Often these types of agreements are put in place if the couple are in the process of separating or are attempting to give their marriage one last chance.

What are the benefits of nuptial agreements?

Having a nuptial agreement provides several advantages, including:

• Clarity – a nuptial agreement clarifies financial expectations and helps avoid misunderstandings in the future. It outlines how assets and debts will be divided, safeguarding each spouse’s financial interests.

• Protection of Assets - if one or both partners bring substantial assets into the marriage, a nuptial agreement can protect these assets from being divided in the event of divorce.

• Reduced Conflict - by agreeing on financial matters beforehand, couples can potentially avoid lengthy and emotionally draining court battles during divorce proceedings.

• Preserving Family Wealth – a nuptial agreement can help protect family wealth, inheritance, and businesses, ensuring that these assets remain within the family's control.

• Customisation - couples can tailor nuptial agreements to their specific needs and circumstances, providing a degree of flexibility that court judgments may not offer.

Are nuptial agreements legally binding?

Nuptial agreements in England and Wales are not automatically legally binding in the same way as, for example, a commercial contract. However, they do hold significant weight in court proceedings if certain conditions are met. The leading case that established the framework for considering pre-nuptial agreements in English law is the case of Radmacher v Granatino [2010] UKSC 42.

In the Radmacher v Granatino case, the Supreme Court held that courts should give effect to a pre-nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless, in the circumstances prevailing, it would not be fair to hold the parties to their agreement. This marked a shift in the approach to pre-nuptial agreements, emphasising the importance of individual autonomy and intentions.

However, the Supreme Court made clear that the following conditions must be met for a pre-nuptial agreement to be given weight:

• Both parties must have had a full appreciation of the implications of the agreement. Each spouse should have received independent legal advice and have had a clear understanding of the agreement's consequences.

• The agreement should not have been signed under duress or undue influence from either party.

• The court will consider whether the agreement was fair at the time it was entered into and remains fair at the time of the divorce.

• Both parties must have disclosed their finances fully at the time the agreement was drafted. Hiding assets or misrepresenting financial circumstances can invalidate the agreement.

• The pre-nuptial agreement should be signed at least 21 days before the parties’ wedding day to prevent any claims of last-minute pressure.

The future of pre- and post-nuptial agreements

In 2014, the Law Commission published a proposal for reforming nuptial agreements. It recommended that the agreements be drafted on a prescribed form, adhere to set safeguards, and if these criteria are met, become legally binding. The courts would be prohibited from making a financial order inconsistent with the agreement except in cases where departure from the agreement:

a) is required to meet one party’s needs, or

b) is necessary to protect the interests of a child of the relationship.

As at the time of writing, the Government has yet to respond to the Law Commission’s recommendations.

Final words

A nuptial agreement can provide both spouses with the peace of mind that decisions concerning the division of matrimonial property are settled in advance. In addition, if one party has brought significant assets into the marriage, they can be reasonably confident they will not become part of the financial settlement should the relationship break down. However, to increase the chances of a nuptial agreement being given weight by the court, it is crucial that both parties seek independent legal advice, and that the agreement is drafted by an experienced Family Law Solicitor.

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