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Postnuptial agreements

Prenuptial agreements (prenups) have grown in popularity in the UK over the past decade or so. Now many couples who previously got married without prenups are considering forming postnuptial agreements (postnups).
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Postnuptial agreements are essentially the same as Prenuptial agreements apart from the fact that they are entered into after marriage or civil partnership rather than before. They set out the assets of one spouse and another (or civil partners), and state which of these are shared and split equally in the event of divorce, separation or death, and which are individual assets to be retained in whole by the individual or their relatives. Some benefits of postnups include:

  • providing extra peace of mind and certainty about financial futures in case the relationship breaks down
  • serving as a record of the assets which have been brought into the marriage by each spouse or civil partner
  • if there are children from previous marriages, a postnuptial agreement can help to protect their inheritance
  • high net worth married couples who move to the UK may want to avoid having their finances determined by English courts (which are considered to be favourable to the non-wealth creating spouse) in the event of divorce

Postnups should be made in writing, signed by both parties and two witnesses. The agreement should set out all financial assets and debts of the marriage and explain how these will be distributed in the event of a divorce, dissolution of civil partnership or death. You can create your Postnuptial agreement.

In the case of complex financial arrangements, you should Ask a lawyer for advice on creating your document.

Note that an independent lawyer should also provide advice to both parties in advance of it being signed, to ensure that they are aware of its implications. Ask a lawyer for more information.

England and Wales

Just as with prenups, postnups are not currently legally binding in England and Wales. However, a landmark case (Radmacher v Granatino) ruled that courts should uphold a prenuptial agreement if it is fair - and it would follow that valid postnuptial agreements should also be upheld. However, in order to increase the likelihood of a court following the instructions of postnups, the following points should be taken into account:

  • Both husband and wife should receive independent legal advice regarding the agreement prior to signing it.
  • The full assets of each party should have been disclosed properly.
  • There should be no pressure on either party to sign the agreement.
  • There should have been no significant changes to the financial or family situation.
  • The terms of the agreement should be fair.

Scotland

In Scotland, postnuptial agreements (just as prenuptial agreements) are legally binding provided they are validly executed as a contract and are fair and reasonable at the time they are entered into.

A postnuptial agreement is fair and reasonable if:

  • Each party must have had sufficient time to fully consider and understand the terms of the postnuptial agreement before entering into it.

  • Each party is aware of all information necessary to allow them to fully consider and understand the terms of the postnuptial agreement.

  • Each party must have received separate and independent legal advice.

  • Neither party was under pressure or duress to sign the agreement against their will.

If there has not been full and frank financial disclosure of the assets of both parties prior to the creation of a postnuptial agreement, the courts are more likely to decide that it is invalid and therefore impose their own financial remedies in the case of a divorce.

It is important to consider whether making a postnuptial agreement will have a positive or negative impact on your particular relationship. Postnups are sometimes made because a marriage is going through difficulties. Discussing practicalities at this sensitive time may precipitate the end of a relationship - or it might create a solid foundation upon which to build things back up - depending on the type of relationship.

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