Nobody gets married or enters a civil partnership expecting it to fail and raising the subject of a Pre-nuptial or Post-nuptial agreement isn’t likely to increase the romance in any relationship. However, with so many marriages ending in divorce each year, more couples are now signing Pre-nuptial or Post-nuptial agreements in the hope of reducing the risk of an acrimonious and prolonged separation.
Over the coming months, we hope to highlight the benefits of entering a Pre-nuptial or Post-nuptial agreement and the practical issues to consider as well as dispelling the many myths that surround them.
A Pre-nuptial and Post-nuptial agreement sets out the basis of how assets such as property, investments and pensions will be divided in the event of a divorce or civil partnership dissolution.
These types of agreements can be entered into before the marriage, a pre-nuptial agreement or after a marriage, a post-nuptial agreement.
Let’s start with a few of the many common myths………..
They are only for the rich and famous
Whilst nuptial agreements are very often entered into by wealthy people there are many reasons why not so wealthy couples enter one. These include:-
- Couples who are marrying later in life and want to protect the assets they have already built up
- Couples who have children from a previous relationship and want to ensure they inherit rather than their spouse
- One or both parties are expecting a future inheritance which they do not wish to share on divorce.
- One or both parties have been gifted money to help towards the purchase of a property for example and want to ensure that money stays with the spouse who was gifted the money
- Where one or both parties own a business
- Where assets have been passed down through the family or there is a family heirloom (which may not necessarily be of financial value)
They are not enforceable in this country
Whilst Pre-nuptial and Post-nuptial agreements are not formerly binding in England and Wales (unlike many other European countries including Scotland) they are likely to be upheld if they are drawn up properly and meet the required criteria. In 2010 the case of Radmacher v Granatino, the Supreme Court said:
“The court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to the agreement”.
Since then, and following a review of ‘Marital Property Agreements’ the Law Commission published a report setting out its recommendations which included the introduction of “qualifying nuptial agreements” as enforceable contracts which would enable couples to make binding arrangements for the financial consequences of divorce.
The Law Commission said that to be a “qualifying nuptial agreement”, it would have to meet certain procedural criteria; needs to be ‘fair’ and must meet the financial needs of each party and any children.
At the current time, those recommendations have not yet been enacted and are still being considered by the government. Until then couples can expect their Pre-nuptial or Post-nuptial agreement to be upheld provided it meets the following key elements:-
- The terms of the agreement are fair to both parties and any children
- The agreement is freely entered into and the terms understood by the couple. Each party should have received independent legal advice or at least had the opportunity of doing so
- The agreement is signed at least 28 days before the marriage and without duress
You don’t need a lawyer to draw up a Pre-nuptial or Post-nuptial agreement
Jotting down an agreement on a piece of paper and signing it as a couple walking up the aisle is not going to protect either of them. It is vital that a lawyer drafts the agreement to ensure it meets the criteria and avoids the risks of it not being upheld at a later date. Whilst there is an assumption that involving lawyers will create tensions and undermine any trust between the couple the reality is very different. The majority of family lawyers will approach the negotiations with sensitivity and will discuss with their client the various options available to them for discussing the terms of their agreement such as face to face meetings; the collaborative process and mediation.
Pre-nuptial and Post-nuptial agreements are expensive
The cost of a Pre-nuptial or Post-nuptial agreement will depend on the complexity of the agreement and the assets involved. For many, the upfront cost outweighs the potential costs of an acrimonious divorce. When a couple divorce legal fees can easily escalate if they cannot agree on how their assets are to be divided. A Pre-nuptial or Post-nuptial agreement can provide certainty and transparency which will ultimately save a couple of thousand pounds in legal fees in the event they divorce. For many, every pounds they pay to their lawyers is a pound less available to meet their financial needs and those of their children.
In our next blog in this series, we will look at the benefits of Pre-nuptial and Post-nuptial agreements and what they should include.
If you are considering putting in place a Pre-nuptial or Post-nuptial agreement our specialist family lawyers in Brighton, Horsham and London can help put in place arrangements in a sensitive way, which reflect your individual needs. Please get in touch.