Pre-Nuptial Agreements – What are they and do I need one?

A pre-nuptial agreement is a document signed by a couple before their marriage that sets out what they will do with their property, assets and income in the event they split up. It is also possible to enter into an agreement prior to a civil partnership ceremony (sometimes called a pre-partnership agreement) or after a marriage or civil partnership ceremony has taken place (sometimes known as a post-nup). The legal issues in relation to all three types of agreement are the same.

What sort of things can be covered by a pre-nuptial agreement?

There are almost as many variations as there are agreements, but some common themes are:

  • how a particular asset, such as the family home, should be dealt with in case of divorce
  • whether or in what circumstances one party would pay ongoing maintenance to the other
  • if one party is very wealthy and would probably be called upon to support the other, what that support would mean in practice – a lump sum, a trust, provision of a property etc
  • an agreement not to share out a particular asset, for example a property owned prior to the relationship

A pre-nuptial agreement should not deal with issues such as how much time the parties’ children would spend with each of their parents after separation. The most successful pre-nuptial agreements stick to financial issues only.

Are pre-nuptial agreements binding?

There isn’t a one-word answer to this question. Pre-nuptial agreements are not like contracts for the sale of goods and the court always has the final say on what financial settlement should be made in case of dispute. However, two very high-profile cases from the last decade (MacLeod v MacLeod (2008) and Radmacher v Granatino (2010)) have taken pre- and post- nuptial agreements to a point where they are extremely difficult to go back on if they have been put together properly.

Who might benefit from having a pre-nuptial or pre-partnership agreement?

Often, couples entering into pre-nuptial agreements will have some kind of contrast in their financial positions. This could be where one party has substantial inherited wealth or the expectation of an inheritance and wants to limit the extent to which these assets are shared in case of divorce. Alternatively, a party might have built up a business before marriage and is concerned about safeguarding this asset. 

As pre-nuptial agreements are private documents, there are no reliable statistics as to how many are being entered into and the reasons for so doing. Speaking purely from our own experience at JMW, we often see pre-nuptial agreements being entered into by those who are marrying later in life and/or have been married and divorced before. They are also an increasingly important ‘wealth preservation’ tool among entrepreneurs and those who have built up assets before meeting their fiancé(e). 

Alternatively, some see their pre-nuptial agreement as a sort of ‘will’ drafted in case the marriage breaks down. This does not mean they fear or suspect that their marriage will not last; it just means that if it does, they are able to sort things out with reference to an agreement drawn up at a less stressful, possibly more rational time in their lives.

I have never heard of a post-nup. What is it?

A post-nup, post-marital or post-partnership agreement is a document setting out what will happen to a couple’s finances in the event that they separate, which is drawn up after they are married or enter into a civil partnership.  Many people entering into a pre-nuptial agreement will revisit it and confirm their agreement to the terms in the form of a post-nup. The legal framework is very similar in that they are likely to be adhered to provided they have been drawn up properly.

A post-nup could be used either as a ‘will’ for the marriage, covering all relevant financial matters, or be drawn up at the point a party to the marriage went into a business venture or acquired an asset with the aim of protecting the asset in the event of divorce.

I am getting married this year, when should I start looking at a pre-nuptial agreement?

If you are engaged and are considering entering into a prenuptial agreement, it is never too early to start planning. Particularly where there are complex assets involved, it can take some time to gather the necessary information, consider the options and negotiate the terms of the agreement. We would recommend that taking advice on the possibility of a pre-nuptial should form an early part of the wedding plans. It is very important that the agreement is concluded well in advance of the wedding date - we would say at least a month before, if possible.  

Please do not hesitate to contact the team should you have any questions by using the contact form on this page. 

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