What Is a Postnuptial Agreement?
A postnuptial agreement is an agreement made after a couple has married or entered into a civil partnership. It sets out how they intend their finances and assets to be treated if their relationship later ends.
Postnuptial agreements can address many of the same issues as prenuptial agreements, including property, business interests, investments, pensions, inherited wealth and other financial assets. The key difference is timing: a prenuptial agreement is made before marriage or civil partnership, while a postnuptial agreement is made afterwards.
For some couples, a postnuptial agreement provides a way to put clear financial arrangements in place after their circumstances have changed. It may also be used to update arrangements made in an earlier prenuptial agreement.
In England and Wales, postnuptial agreements are not automatically legally binding. However, the court can give considerable weight to a properly prepared nuptial agreement when deciding financial matters on divorce or dissolution.
Below, we explain in further detail what a postnuptial agreement can cover, how it works and what you should consider before entering into one.
What Does a Postnuptial Agreement Do?
The purpose of a postnuptial agreement is to give both parties greater clarity about their financial position during the marriage and what should happen to their assets if they later separate.
The agreement can identify assets that the parties intend to keep separate and set out how other assets should be divided in the event of a divorce. This can make each person's expectations clearer before any relationship breakdown occurs.
A postnuptial agreement can potentially deal with:
- The family home and other property
- Savings, investments and bank accounts
- Pensions
- Business assets and business interests
- Inherited wealth
- Trust interests
- Assets brought into the marriage by either party
- Future inheritances or gifts
- Debts and liabilities
- Financial provision for either spouse or civil partner
- Particular assets the parties want to treat as separate from their wider matrimonial property
For example, one spouse may have received a large inheritance that they want to preserve for future generations. Alternatively, one party may own a business that has grown substantially since the marriage. A postnuptial agreement allows the couple to record how they intend those assets to be treated if they divorce.
This does not mean that the agreement simply removes those assets from the family court's consideration. The court retains responsibility for achieving a fair outcome. However, a properly prepared nuptial agreement can be an important part of the financial picture.
If you are considering an agreement after marriage, our postnuptial agreement solicitors can advise you on how the terms should reflect your financial circumstances and long-term priorities.
When Can You Make a Postnuptial Agreement?
A postnuptial agreement can be made at any point after a marriage or civil partnership has begun.
There does not need to be a particular event that triggers the agreement. Some married couples decide relatively early in their marriage that they would like greater certainty over their financial arrangements. Others consider a postnuptial agreement when their circumstances change substantially.
Common examples include:
- One spouse receiving a significant inheritance or gift
- A family business increasing substantially in value
- One person acquiring new business interests
- The birth of children
- Changes to a couple's property portfolio
- One spouse giving up or reducing work to care for children
- Significant changes in the parties' income or financial positions
- Changes to trust or estate planning arrangements
- One or both spouses receiving substantial family wealth
A postnuptial agreement can also be used where a couple already has a prenuptial agreement but wants to update or reaffirm its terms. This may be appropriate where circumstances have changed significantly since the original agreement was signed.
We explore the situations in which couples may want to put an agreement in place in more detail in our guide to why you should consider a postnuptial agreement.
Are Postnuptial Agreements Legally Binding in England and Wales?
Postnuptial agreements are recognised by the courts in England and Wales, but they are not automatically legally binding.
If a marriage ends, the family court retains discretion to decide how the couple's financial arrangements should be resolved. When doing so, it must consider the circumstances of the case and the statutory factors that govern financial provision on divorce.
However, the existence of a nuptial agreement can be highly significant.
The leading case is the Supreme Court decision in Radmacher v Granatino. The court held that appropriate weight should be given to a nuptial agreement that was entered into freely by both parties with a proper understanding of its implications, unless it would be unfair to hold the parties to the agreement in the circumstances.
Although Radmacher concerned a prenuptial agreement, the Supreme Court considered nuptial agreements more broadly, including agreements made after marriage.
This means that the answer to whether postnuptial agreements are legally binding is more nuanced than a simple yes or no. They do not remove the court's powers, but a well-prepared agreement that satisfies the relevant safeguards can carry substantial weight in future divorce proceedings.
What makes a postnuptial agreement more likely to be upheld?
The circumstances in which the agreement was prepared are particularly important.
Factors likely to strengthen the position of a postnuptial agreement include:
- Both parties entered into the agreement freely: There should be no undue pressure, coercion or improper influence.
- Both parties received independent legal advice: Each person should understand what the agreement means for them before signing it.
- There was full financial disclosure: Each party should have sufficient financial information to understand the other's assets, liabilities, income and resources.
- Both parties understood the implications: They should have a full appreciation of the consequences of entering into such an agreement.
- The agreement is fair: Terms that leave one party unable to meet their reasonable needs are less likely to carry decisive weight.
- The needs of any children have been properly considered: An agreement should not prejudice the reasonable needs of children or leave either parent without sufficient resources to meet them.
- The agreement remains relevant: Significant changes in circumstances may affect how much weight the court considers appropriate to give it.
JMW also advises on disputes where one person seeks to challenge a prenuptial or postnuptial agreement, including questions about disclosure, fairness and whether the agreement was freely entered into.
How Do You Make a Postnuptial Agreement?
A postnuptial agreement should reflect your actual financial circumstances and give both parties an opportunity to understand the effect of its terms.
Although the details will vary, the process will generally involve the following stages.
1. Decide what you want the agreement to achieve
You should first identify the financial matters you want the postnuptial agreement to address.
For example, you may want to protect inherited assets, establish how a business should be treated in the event of a divorce, or agree how property and investments would be divided.
Understanding the objective at the outset makes it easier to develop financial arrangements that are clear and workable.
2. Provide financial disclosure
Both parties should provide full financial disclosure.
This will usually involve sharing information about property, savings, investments, pensions, businesses, trusts, liabilities and other financial resources.
Disclosure is important because each person needs sufficient information to understand the financial position they are agreeing to. If significant assets are concealed or relevant financial information is withheld, this could affect the weight given to the agreement later.
3. Take independent legal advice
Both parties should have independent legal advice.
One solicitor should not advise both spouses on whether the terms of the agreement are in their interests. Separate family lawyers allow each person to understand their own legal position and the consequences of agreeing to the proposed terms.
Independent legal advice also helps demonstrate that both parties knew what they were agreeing to when the document was signed.
4. Draft and negotiate the terms
The solicitors can then prepare and negotiate the wording of the agreement.
This stage may involve considering which assets should remain separate, what provision should be made for each spouse and how the arrangements would work in different circumstances.
The objective should not simply be to produce the most protective agreement possible for one party. An agreement is more likely to carry weight if the overall outcome remains fair.
5. Sign the agreement
Once the parties have taken advice and agreed the terms, the final postnuptial agreement can be signed.
Both parties should have a clear understanding of what they are signing and should enter into the agreement voluntarily.
6. Keep the agreement under review
Circumstances can change considerably during a marriage.
A well-drafted agreement may therefore contain a review clause identifying particular events or intervals at which the parties should reconsider its terms.
What Cannot Be Decided by a Postnuptial Agreement?
Postnuptial agreements are primarily designed to address financial matters. There are limits to what they can determine.
Child arrangements
A postnuptial agreement cannot conclusively determine future child arrangements.
For example, parents cannot use an agreement to guarantee where a child will live or how much time they will spend with each parent if the relationship breaks down years later.
Decisions about children must reflect their welfare and best interests at the relevant time. Circumstances that exist when a postnuptial agreement is signed may look very different by the time a separation takes place.
For that reason, references to future child arrangements in such agreements cannot prevent the family court considering what is best for the child if a dispute subsequently arises.
Child maintenance
Parents may make arrangements about financial support for their children, but a postnuptial agreement cannot simply remove the legal framework governing child maintenance.
Depending on the circumstances, child maintenance may be dealt with through a private arrangement, the Child Maintenance Service or, in particular cases, through the court.
Everyday aspects of married life
A postnuptial agreement is not generally intended to regulate routine aspects of the marital relationship.
Its main purpose is to provide a framework for financial arrangements rather than to impose rules about day-to-day behaviour within the marriage.
Postnuptial Agreement vs Prenuptial Agreement: What Is the Difference?
A prenuptial agreement and a postnuptial agreement serve broadly similar purposes. The main difference is when the agreement is made.
| Prenuptial agreement | Postnuptial agreement | |
| When is it made? | Before marriage or civil partnership | After marriage or civil partnership |
| What can it cover? | Property, businesses, investments, inheritance and other assets | Broadly the same financial matters |
| Can it distinguish between different assets? | Yes | Yes |
| Is it automatically legally binding? | No | No |
| Can the court give it significant weight? | Yes, depending on the circumstances | Yes, depending on the circumstances |
A postnup is therefore not necessarily weaker or less useful than a prenup simply because it was signed after the marriage.
Both types of nuptial agreement are assessed according to principles including whether the parties entered into the agreement freely, whether they understood the implications and whether it would be fair to hold them to its terms.
If you are considering an agreement before marriage, read our guides to what a prenup is and what a prenup does.
What Are the Advantages of a Postnuptial Agreement?
Whether a postnuptial agreement is worthwhile will depend on the circumstances of the marriage and what the parties are trying to achieve.
Advantages of a postnuptial agreement
A well-prepared agreement can provide several benefits.
Greater financial clarity
Both parties know how they intend particular assets and liabilities to be treated. This can be particularly useful where financial arrangements have become more substantial during the marriage.
Protection for inherited or family wealth
A postnuptial agreement can record an intention that a large inheritance, trust interest or other family wealth should remain separate if the marriage ends.
Greater certainty for business owners
Where one spouse owns a company or other business interests, the agreement can establish how those interests should be approached in a future divorce.
Protection for the financially weaker party
Postnuptial agreements are not only tools for protecting existing wealth. They can also provide financial security for a spouse who has reduced their earning capacity, for example by leaving work or reducing their hours to care for children.
Fewer issues to resolve if the marriage ends
An agreement made while the relationship remains intact can establish a framework for a future financial settlement. If divorce subsequently occurs, this may reduce the areas of disagreement between the parties.
When Should You Review a Postnuptial Agreement?
A postnuptial agreement is not a document to sign once and then forget.
A review clause can specify when the parties should reconsider the agreement. This may involve reviewing it after a fixed number of years or following particular changes.
Events that may justify a review include:
- the birth or adoption of a child
- a significant inheritance
- the sale or substantial growth of a business
- major changes in income or employment
- one spouse stopping work
- a significant change to property or investment holdings
- changes involving trusts or family wealth
- relocation overseas
- a substantial change in either person's financial needs
A significant change does not necessarily make the postnuptial agreement invalid. However, it may affect whether the terms remain fair and therefore how much weight a court would give the agreement in a future divorce.
What Happens to a Postnuptial Agreement If You Divorce?
If you later divorce, your postnuptial agreement can provide an important starting point for determining your financial settlement.
Where the agreement was properly prepared and remains fair, it may substantially influence the way assets are divided. This can give both parties greater certainty about their respective positions and potentially narrow the issues requiring negotiation.
However, the postnuptial agreement is not itself a substitute for resolving the financial consequences of divorce.
Divorce and financial matters are separate legal processes. A final divorce order ends the marriage, but does not necessarily bring financial claims between former spouses to an end. It is therefore advisable to formalise financial arrangements through an appropriate court order.
Where the parties agree a settlement, it should be recorded in a financial consent order and submitted to the court for approval. An existing prenuptial or postnuptial agreement can be reviewed and used as the basis for a consent order where appropriate.
Where agreement cannot be reached, the court can determine the financial outcome. The existence and circumstances of the postnuptial agreement will then form part of the issues the court considers.
You can learn more about this process from our financial settlement solicitors.
Talk to Us
The terms of a postnuptial agreement can have significant consequences for both parties if the marriage or civil partnership later ends. Taking specialist family law advice allows you to understand your position, identify the assets that need to be considered and create an agreement that properly reflects your circumstances.
Our family law team advises on postnuptial and prenuptial agreements involving a wide range of financial arrangements, from family homes and pensions to businesses, property portfolios, trusts, investments, inherited wealth and international assets. We can also advise where an existing agreement needs to be reviewed or where the validity or effect of a nuptial agreement is disputed.
To discuss your circumstances with our family law team in confidence, call 0345 872 6666 or complete our online enquiry form to arrange a call at a time that suits you.
