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What is a postnuptial agreement?
The purpose of a postnuptial agreement (also called a post-nup or a post-marital agreement) is also to specify what should happen to each partner’s assets after divorce. However, a postnuptial agreement is entered into by the couple after marriage.
The effects of post nuptial agreements under UK law
It is only since 2010 that the courts have begun to regard nuptial agreements as binding. Even now, the court retains a wide discretion to approve or alter them if the consequences would be grossly unfair to one of the parties. This usually arises where there has been a change of circumstances not contemplated by the parties when the agreement was made, altering and the basis upon which the parties anticipated their arrangements would be made after divorce.
A good example would be if one of the parties became seriously and permanently ill or had a disabling accident after the agreement had been made. For example, if the nuptial agreement said that, for example, after a divorce, neither party was able to look to the other for continuing support but, because of the health condition, that ill or injured party was unable to work, it would be unfair that the other should not have an obligation to support his/her former spouse.
Similarly, if the agreement said nothing about what the situation would be if the parties had children and by the time of the separation and divorce they do, the court will scrutinise the agreement very carefully against the current financial situation to decide whether the agreement remains fair.
The factors that will be relevant in deciding whether a nuptial agreement should be binding
The court will take into account the following circumstances when deciding whether the parties remain bound by a nuptial agreement:
• Did each party have independent legal advice before signing the agreement?
• Did each party make full and honest disclosure of their financial position before signing the agreement?
• Was either party put under pressure to sign the agreement?
• Does the agreement fairly meet the needs of everyone (the parties and any children) in the circumstances at the time of the divorce?
What are the advantages of a post-nuptial agreement?
The law allows the judges a very wide discretion on how to deal with financial matters after a divorce.
Nuptial agreements are most likely to be of benefit, at least to one of the parties, if there is a considerable amount of money involved. Similarly, if one (or sometimes both parties) bring to the marriage what might be called ‘family assets’ e.g. farms, businesses, trusts, inherited wealth etc.
Nuptial agreements made before marriage also have another benefit. They provide clear evidence of who owned what at that stage. The significance of this is that assets brought into the marriage can, in many circumstances, be disregarded when financial arrangements are being made at the time of a divorce. This is called non-matrimonial property. It is therefore less likely to be divided equally, because it is not the product of the marriage partnership.
How Barnes Harrild & Dyer Solicitors can help
For further information and a free telephone consultation, reach out to us via the blue contact boxes at the top of this page, and a Divorce and Family solicitor from our Central London or Croydon office will get back to you with a same day response.