Pre and post-nuptial agreements are legal agreements for couples to enter into to determine how their respective assets will be dealt in the event of divorce.
What is a Pre-nuptial agreement?
Also known as a “pre-nup”, “pre-marital agreement” or “pre-nuptial contract”, a pre-nuptial agreement is entered into by a couple before they get married and the idea is to determine what will happen to assets and maintenance upon the breakdown of their marriage.
Typically, a pre-nuptial agreement is most common when one or both parties are bringing pre-acquired assets or wealth into the marriage.
Why should I enter into a Pre-nuptial agreement?
You should consider a pre-nuptial agreement in the following circumstances:-
- If you wish to protect assets owned before you marry such as inherited wealth, business or trust interests.
- You want to provide evidence of what assets were brought into the marriage (assets brought into the marriage but not subsequently subsumed into matrimonial assets, are known as non-matrimonial property and are less likely to be divided equally).
- You want to avoid having to endure lengthy, drawn-out proceedings.
- You want to be clear about what the financial arrangements will be in the event of divorce.
What happens if we do not have a pre-nuptial agreement in place and we are going through a divorce?
In the event of divorce, if financial issues cannot be agreed then the parties will have to apply to the Court for a financial order to determine the issues including how assets will be split.
Parties can put forward representations as to how assets should be divided however in the absence of a pre-nuptial agreement, the decision ultimately lies with the Court. The starting point for the division of matrimonial assets is 50/50 however this can be departed from considering several factors including needs of any children, the age of the parties, the length of the marriage and their respective contributions.
What is a Post-nuptial agreement?
A post-nuptial agreement is entered into once you are already married. Some couples have a post-nuptial agreement drawn up if they have previously separated and then reconciled.
A post-nuptial agreement is similar to a pre-nuptial agreement in that the couple wish to set out what should happen if the marriage was to end.
What is the law on pre-nuptial and post-nuptial agreements in the UK?
Pre-nuptial and post-nuptial agreements are not necessarily legally binding as the Court still retains the discretion to order what it considers to be fair in all the circumstances of the case and this may mean not upholding the agreement.
The landmark case of Radmacher v Granatino [2010], determined the way in which pre-nuptial agreements are dealt with by the Court in the England and Wales. In this case, it was decided by the Supreme Court that pre-nuptial agreements should be given decisive weight in divorce proceedings as long as both parties have entered into the agreement freely, fully appreciate the implications and the terms are reasonable.
Whilst a nuptial agreement is not automatically legally binding, the Court will uphold it unless it is unfair to do so and therefore it is paramount to seek independent expert legal advice before signing any such agreement.
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