Do you need a pre-nup or post-nup? Guest blog by Claire Porter from SAS Daniels

by Claire Porter

Oct 20 2024

Nuptial agreements have seen a rise in popularity in the UK with high profile divorces highlighting the risks of not having a pre-nup or post-nup in place. In addition, people now tend to get married later in life when they have accumulated more wealth and therefore have more assets to protect.

What is a pre-nuptial agreement?

A pre-nuptial agreement is a contract which couples enter into prior to marriage. It ensures that there is a clear plan in place with regards to what will happen to assets that either person brought into the marriage or future inheritance in the event of divorce. For example, whether such assets should be treated differently than assets which the parties build up together during their marriage.

What is a post-nuptial agreement?

A post-nuptial agreement is a contract which is entered into after marriage.  Like a pre-nup, a post-nup sets out how assets would be shared in the event of the marriage ending.

Why would you need a pre-nup or post-nup?

Once married, all assets are thrown into a “matrimonial pot” and are up for division between the parties.  Nuptial agreements are often drafted before second marriages, particularly where there are children from the first marriage.  By entering into an agreement certain assets can be excluded from the “matrimonial pot” to ensure that children’s inheritances are left intact in the event of divorce or death.

Younger couples entering into marriage for the first time are also taking out a nuptial agreement, which can be used to protect wealth from the Bank of Mum and Dad, which can arise in circumstances whereby parents have helped their children buy a property. The couple are likely to receive large gifts of money, shares in a company/family business, or future inheritances/windfalls during their marriage. Depending on the financial assistance provided to a younger relative, it may also be worth putting in place a trust or loan agreement.

If you want to protect assets to ensure your financial stability in case things don’t work out, wish to try to avoid a stressful, lengthy and costly legal battle about who gets what, or ensure the financial stability of any children you may have from a first marriage then a pre-nuptial agreement could be right for you.

Are they legally binding?

In England and Wales, nuptial agreements are not legally binding if one spouse wants to try to argue that they should not be bound by its terms.  Ultimately, it is the family court that will have the last word when deciding how assets and income ought to be divided on divorce. However, the good news is that in the case of Radmacher v Granatino the Supreme Court indicated to Judges sitting in the family courts that they should take notice of a nuptial agreement as long as it has been 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.

If the following safeguards have been met when creating a nuptial agreement, then it is more likely to be upheld by judges sitting in the family court and the parties should expect to be held to the terms of any nuptial agreement entered into.  The safeguards are:

1. Both parties have had separate and independent legal advice.
2. Both parties have disclosed their financial positions.
3. Both parties have negotiated the terms of the agreement well before the date of marriage (a minimum of 28 days but ideally much longer). This is to avoid undue pressure – “sign this or the wedding is off…”.
4. Both parties have agreed to review the terms in the future, as circumstances change such as the birth of a child.

Based on my own experiences in family law, nuptial agreements are complex and intricate documents, requiring considerable thought and attention to detail.  For example, if gifts are received from parents on marriage or from family members trying to avoid inheritance tax, or there are assets located in other jurisdictions, these issues need to be considered carefully.

Whether you love or hate the idea of nuptial agreements, they are on the rise.  They may not be very romantic but neither is spending time in court and money on legal fees where this can be avoided.  It is important that couples think about what they want to happen in the event they don’t get their happy ever after. After all, is it not better to talk about the “worst case scenario” at a time when you are most in love, not later when there may be bitterness and arguments?   

What does a pre-nup or post-nup cost?

You are likely to find that the cost of entering into a nuptial agreement is very attractive when taking into consideration the benefits of having peace of mind in the event of divorce. The cost of a nuptial agreement in comparison to the total cost of the average wedding is likely to be a drop in the ocean!

Each solicitor will charge a different price but it’s vital to make sure that they are a specialist in family law. At SAS Daniels we help our clients determine a pricing structure that suits their needs and discuss any costs at the beginning so you don’t receive any unexpected bills.

Claire Porter is a Partner in the family team at SAS Daniels, advising individuals on both their personal and professional affairs.  She is a recommended lawyer in the Legal 500 and Chambers and Partners Directories.  Claire deals with matters for clients wherever they are based, whether in the North West, London or elsewhere in the UK and abroad. View her profile.

The information contained within was correct at the time of publication but is subject to change. This is a guest article by SAS Daniels. 

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