The Rise of the Postnuptial Agreement

It can come as a shock to be asked to enter into a nuptial agreement after being married for several years.  If you are asked to enter into a postnuptial agreement, it is imperative you understand the purposes of such a contract and the long-term ramifications it may have on your future.

What is a postnuptial agreement?

A postnuptial agreement[1] is a contract between two people who are already married or in a civil partnership and is essentially the same as a prenuptial agreement but occurs after the marriage.  Postnuptial agreements typically define how the couple wish their matrimonial assets to be divided in the event of divorce or separation.

Postnuptial agreements exist to provide clarity (regarding financial arrangements), certainty (on how assets will be divided on divorce or separation), and protection of assets (e.g. inheritance or assets owned before the married or civil partnership).

For a postnuptial agreement to be valid, it must be in writing and signed by both parties to the marriage or civil partnership, and by two witnesses.  The agreement will contain full details of the current property, assets (individually and jointly owned), income, insurances (e.g. life insurance) and debts held by the couple, and an explanation of how these will be split on separation.

Are post-nuptial agreements legally binding?

Nuptial agreements are not legally binding, and therefore cannot be assumed to override the Court’s discretion when it comes to the division of marital property.  However, the Supreme court held in the case of Radmacher v Granatino (2010) that “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 their agreement”.  The issue of fairness is then answered by three key questions:

  1. Was the agreement entered into freely?
  2. Did the parties fully appreciate the implications of the agreement they were entering?
  3. Is it fair to hold the parties to their agreement given the prevailing circumstances?

In assessing the matter of fairness, the Courts will consider factors such as the age, maturity, rights of the children within the family, previous experience of long-term relationships, whether there was full and frank disclosure of finances by both parties, and whether any undue pressure was placed upon either person.

The fairness tests show there is no automatic assumption that a postnuptial agreement will be upheld, but if entered into validly, it the Court will give it considerable weight and is unlikely to undermine the contract.

A trend among high-net-worth couples

Postnuptial agreements are not a new concept; however, many Solicitors will attest to the increasing numbers they are seeing.  But what is behind the uplift?  We believe some of the key drivers include the increase in blended families, whereby one party will want to secure their personal wealth for the benefit of children from a previous relationship, individuals wishing to ring-fence any windfall received during the marriage, such as an investment dividend or inheritance, and the rise of high-net-worth individuals.

Immigration of wealthy couples is also a significant factor underpinning the increase in postnuptial agreements.  The UK and London in particular, has become a popular destination for the wealthy, but due to the favourability afforded to English Courts to the weaker financial party, some wealthier spouses are insisting on a postnuptial agreement before relocating.  However, it should be clarified that postnuptial agreements are not just for the rich, the explosion in property values over the past twenty years has resulted in many finding themselves in possession of property of significant value.

Before entering into a post-nuptial agreement

Entering into a postnuptial agreement requires careful consideration.  Each party needs to be clear on their reasons for drawing up a nuptial agreement, and whether it is the best approach to achieve the desired outcome.  If you feel as though you need a better understanding of the agreement you are about to enter into, take your time before signing.  Regardless, you should always seek independent legal advice so that you can ensure your best interests, and those of your children are protected.

In conclusion

Ultimately life is not always foreseeable.  Couples may enter matrimony with no desire to create a nuptial agreement; however, things change.  For example, one party may commit infidelity, and the other may decide to try and save the marriage, but on the condition, a postnuptial agreement is put in place in case the relationship cannot be saved.  Postnuptial agreements are not just for the rich and famous; any party to a marriage or civil partnership may gain financial security for themselves and their children by drafting and entering into one.  But in doing so, it is incumbent on both parties to act in a manner that is completely fair, open, and honest.  Not doing so could result in the tests for fairness, and hence validity, not been met, and the agreement not being upheld.

Rosie Bracher is a specialist family law firm based in Barnstaple.  We have the knowledge and expertise to advise you on all matters involving family law.  Please contact our office on 01271 314 904 and arrange to speak to one of our team.


[1] Post-nuptial agreements also encompass Post-registration and Post-civil partnership agreements

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