What are Pre-nuptial and Post-nuptial agreements?
A pre-nuptial agreement (“pre-nup”) is a contract entered into by a couple before they get married that sets out what will happen to their assets in the event that the marriage breaks down.
A post-nuptial agreement (“post-nup”) works to achieve this too, however, this is entered into after a couple have married.
Who may need a Pre-nup or Post-nup?
A pre-nup or post-nup is not just for the extremely wealthy and it could be advisable to enter into an agreement in the following situations:
- A second marriages between parties who wish to preserve their pre-acquired wealth for the benefit of children of a previous marriage.
- Where one or both of the parties wishes to ring fence inheritances they expect to receive.
- Marriages where there are substantial trust assets, including where such assets are derived from gifts or inheritances.
Current Legal Position
Although pre-nups and post-nups are not legally binding in England and Wales, properly drafted Agreements are more likely to be upheld by the Court now, than they have ever been before.
On divorce, the Court has very wide discretionary powers to distribute matrimonial assets as it sees fit to achieve a fair and reasonable balance between the parties having regard to their needs and resources, the needs of any relevant children and all the circumstances of the case. A pre-nup will be one of the circumstances which the Court will take into account.
A properly prepared pre-nup or post-nup gives the best protection currently available to the economically stronger spouse.
In order to have the best chance of being upheld, pre-nups and post-nups;
- Contents should be fair.
- Both parties must obtain separate independent legal advice before entering into the agreement to ensure they understand what they are agreeing to.
- Both parties must provide disclosure of their financial circumstances (usually summarised and attached to the pre-nup or post-nup in the form of a schedule).
- Both parties should consider and reflect on the terms of the proposed agreement, at least 1 month before the wedding date. Couples who leave it too close their wedding date may be best advised to start their discussions for their agreement but sign a post-nup after the date of the wedding.
- There must no question of duress, undue influence or misrepresentation. Both parties must enter the agreement freely.
Parties may need legal advice from foreign lawyers if they live or expect to live abroad. Indeed, it may be necessary to have a separate pre-nup or post-nup in each of the countries where the parties may live. Parties with dual nationality should pay particular attention to this.
Our guide offers more information about pre-nups and post-nups. Alternatively, contact one of our solicitors.
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To obtain further information on the law relating to Pre-Nuptial and Post-Nuptial Agreements, download the guide below. If you would rather speak to us on the phone, call our expert solicitor Pradeep Shina.