Whilst prenups (also known as pre-nuptial agreements/pre-marital agreements) and postnups (post-nuptial agreements) have historically been seen as the domain of the “super wealthy,” these days this is no longer the case, and they are becoming more common in the UK.
With parties considering the realities of modern relationships (be they marriage or a civil partnership) many wish to take steps to protect their assets and reduce the potential uncertainty on the breakdown of the relationship. Whilst some people may consider the concept of entering into such an agreement as deeply unromantic, others see it as an entirely practical way forward in the unfortunate event of a divorce or dissolution.
What is a prenup?
A prenup, (pre-nuptial or pre-marital agreement) is a written contract that couples can enter into before a marriage or civil partnership to outline how finances, assets and liabilities are dealt with if the relationship ends. They can be particularly useful if one party is bringing significantly more assets into the relationship - such as property or a business - or in the event they have inherited money from their family or if they are the beneficiary of a family trust which they wish to protect. Prenups are increasingly common in second marriages where the parties are keen to protect assets which they have previously built up.
What is a postnup?
A postnup (post-nuptial agreement) is a written contract that couples can enter into after they get married or enter a civil partnership. They are exactly the same as a pre-nuptial or pre-martial agreement, save for the stage that they are entered into. A postnup is a good option to consider if there is insufficient time to enter into a prenup before the planned wedding or civil partnership.
Do I need a prenup or postnup agreement?
It will be a personal decision but in reality, many couples benefit from having such an agreement in place. If you are asking yourself if you need one – then you probably do!
Consideration will be given to whether such an agreement is appropriate in each individual case but by way of simple guidance a pre-nuptial/pre-marital/post-nuptial agreement would be helpful if it is second marriage/civil partnership and you want to try and ringfence the assets you are bringing into the relationship, or in the event that you want to protect future inheritance for your children from a previous relationship. Such agreements can also record how financial responsibilities will be managed if one of the parties enters the marriage/civil partnership with significant debt.
Are prenup and postnup agreements binding?
Currently prenup and postnup agreements are not legally binding in England and Wales, although the Family Court’s approach to such agreements has evolved over the years.
Such agreements are something that the Family Court will consider and give weight to when decisions are being made about a couple’s finances. Whilst case law has stated that the Court “should” give effect to a pre-nuptial/pre-marital agreement that is “freely entered into” by both parties, the agreement can be challenged where there is a lack of legal advice, a failure to provide accurate disclosure of financial circumstances, duress, and, most commonly, when the agreement fails to meet a party’s financial needs.
Steps can be taken to avoid some of these issues such as ensuring that both parties obtain independent legal advice regarding the contents and effect of the agreement and provide full and frank disclosure of their respective financial circumstances.
To avoid claims of duress a prenup should be signed at least 28 days before the date of the intended marriage or civil partnership. It is good practice if you want to enter into such an agreement to seek legal advice well in advance - ideally 6 months before the date of your marriage or civil partnership. Pre-nuptial/pre-marital and post-nuptial agreements are complex documents, and their preparation should not be rushed.
The Court will depart from the terms of a prenup or postnup agreement in circumstances where the terms of the agreement do not meet the needs of each party. This is particularly relevant in cases where the parties have subsequently had children together, unless the pre-nuptial agreement includes provision for this. This principle was upheld in a recently reported case* where the Family Court gave appropriate weight to a pre-nuptial agreement that the parties had entered into, but the precise terms of the agreement were departed from to ensure that the Wife’s needs could be met. Having said that, the Wife would have received a more generous settlement had a prenup not been entered into before they got married.
For help or advice on this topic or related issues please contact Liz at liz.orman@salaw.com or call 01727 798 064
* AH -v BH (2024) EWFC 125
