Money – For Post-relationship Agreements
It is likely that you will have heard of prenuptial agreements – you may have seen them featuring in films or read about them in novels. And yet many people are unaware that you can have a postnuptial agreement or other forms of agreements after a relationship have begun or after it ends. There are a number of post-relationship agreements that our clients enter into:
- A postnuptial agreement is an agreement between parties who are in a marriage or civil partnership. The relationship may be very happy but the parties decide that they would like to organise their financial relationship with each other in the event that the relationship subsequently breaks down.
- A cohabitation agreement (sometimes called a ‘Living Together Agreement’) is available for people who have not married or entered into a civil partnership but nonetheless recognise, perhaps after years of living together, that their relationship would benefit from being clear about their respective capital interests and responsibility for living expenses.
- Declarations of Trust in respect of property holdings which can be stand alone or used alongside postnuptial agreements or cohabitation agreements.
When is a postnuptial agreement appropriate?
There are a number of circumstances where a postnuptial agreement might be appropriate for you. For example, where:-
- There is a significant disparity in wealth or income between you and your partner;
- For various reasons, you may have missed the opportunity to obtain a prenuptial agreement before the commencement of the marriage or civil partnership;
- You may have already obtained a pre nuptial agreement but decide to have a postnuptial agreement (the ‘belt and braces’ approach) or to vary by agreement the terms of your earlier prenuptial (perhaps to address the birth of children);
- You have been previously married and experienced an unpleasant divorce and want to achieve as much certainty as possible for the financial outcome should your new relationship break down.
- You would like to address a discrete issue that may arise, for example, how an investment in a business should be treated or what should happen to an inheritance.
- You wish to provide for or protect children from your previous relationship.
- You wish to avoid the unpleasantness of a ‘free for all’ on finances after any relationship breakdown;
- You want to avoid the costs and stress involved in trying to decide how assets are divided on separation when objectivity and reason may be in short supply;
- You want to identify the resources to be called upon if challenging issues arise in the relationship, for example, a referral to see a family therapist, or to attend mediation.
A cohabitation agreement might be appropriate for you for all the same reasons listed above for postnuptial agreements. Additionally, the relevant law used to determine disputes between cohabitants in relation to the property they own, or an interest claimed in solely owned property, is complex and very expensive to litigate.
We prefer to facilitate post-relationship agreements using the collaborative model if possible so there can be honest and open discussions, and likely agreements can be reality checked.
We will discuss with you whether you may benefit from the involvement of a family consultant to manage the emotional challenges of negotiating such agreements and ensure your hopefully happy and long lasting relationship starts with strong emotional foundations.