Increasing numbers of engaged and married couples are choosing to sign prenuptial and postnuptial agreements because families are better informed about the benefits of family agreements.
Whereas a prenuptial agreement is signed before the marriage takes place a postnuptial agreement is signed after the marriage.
What is a postnuptial agreement?
A couple who are already married or in a civil partnership may decide to enter into an agreement that shows what they intend to happen to their money and property if the marriage or civil partnership were to end.
A postnuptial agreement can be useful, for example, if after a marriage, a family member wants to gift or leave money to their married child, but wants to protect the family wealth from divorce.
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Why enter into a postnuptial agreement?
Everyone has their own personal reasons for entering a postnuptial agreement. Some simply like to be as financially organised as possible, or perhaps where there has been a separation followed by reconciliation.
However, postnuptial agreements might be particularly beneficial where:
- One of you has considerably greater capital or income.
- One of you wishes to protect assets you owned prior to the marriage.
- For the purpose of inheritance planning.
Are postnuptial agreements legally binding?
In England and Wales, postnuptial agreements are not strictly binding in the event of a later divorce or dissolution. However, a postnuptial agreement may be decisive in the event of any dispute dealt with by the court unless the effect of the agreement would be unfair.
What are some of the important elements for a postnuptial agreement?
When formulating your postnuptial agreement, the following important elements should be complied with:
- Both of you will need to complete full and frank financial disclosure.
- Both of you will need to take independent legal advice on the agreement and its effects.
- Terms of agreement should be “substantially fair” i.e. provide for each of your basic needs.
- There should be no undue influence or duress suffered by either party.
- A statement that you both intend the agreement to be legally binding.
- Must be executed as a ‘deed’ – must be witnessed by an independent witness.
