Understanding Prenuptial and Postnuptial Agreements
Recently, the wedding of Taylor Swift has been in the headlines. We do not know if the happy couple had made a prenuptial agreement prior to their marriage, but as with many high-profile celebrity marriages, it may have been a wise step to protect both of their interests.
Whilst people used to think that prenuptial agreements were only for the rich and famous, an increasing number of couples are now entering into such agreements. It may be that one partner is wealthier than the other going into the marriage, or there is a large income disparity. There may be family trusts or inheritance issues which should be considered. Or perhaps you wish to set out what will happen to pre-marital assets in addition to assets acquired during the marriage or partnership.
What is a Prenuptial Agreement?
A prenuptial agreement is a document signed by a couple before they marry or enter a civil partnership. It sets out how you wish to protect your assets and how they should be divided in the event of a divorce or the dissolution of your civil partnership.
Should we have a Prenuptial Agreement?
High-profile marriages often remind us of the importance of planning with a prenuptial agreement. These agreements help to provide clarity and protect both of your interests, and can give you the confidence of starting your marriage with a shared and agreed understanding of your financial future. Although it could feel uncomfortable to discuss finances before marriage, honest conversations from the start can often strengthen your relationship and give clear expectations.
Are Prenuptial Agreements Binding?
At present, prenuptial agreements are not automatically enforceable by the courts in England and Wales. However, a properly drafted and executed prenuptial agreement is likely to be persuasive to the court.
Postnuptial Agreements
If you are already married or in a civil partnership, you can still make a postnuptial agreement. It sets out what would happen to your assets should the marriage break down. Postnuptial agreements are often entered into by couples who separate and reconcile as an added protection if things go wrong again. They are also chosen by couples who wish to protect assets they owned before the marriage. It deals with your assets, debts, inheritance, future income, maintenance and provisions for children.
As for prenuptial agreements, for a post-nuptial agreement to carry weight, the following must have been considered and taken into account:
- Both of you must take independent legal advice on the agreement and the effects before entering into it.
- You must exchange full financial disclosure.
- The terms of the agreement must be fair and reasonable.
- No undue influence or duress must be applied to either person when entering the agreement.
- Legal contractual requirements were followed when the agreement was entered into, including a statement that you and your spouse intend to ‘create legal relations’ by agreeing. The agreement must also be executed as a deed, signed by you or your legal representative, and witnessed by an independent person.
- It is often advisable that your postnuptial agreement is reviewed regularly. If either of your financial positions changes, this should be done sooner. If an event occurs such as the birth of a child, either one of you has health issues, or earning capacity changes, you should also review your agreement.
Contact Us
If you wish to discuss a prenuptial or postnuptial agreement, please get in touch with our family law team on 01492 874774, and we can help you further.