We look at the benefits of a ‘post-nuptial’ agreement
We’ve been encouraging people to draw up ‘pre-nuptial’ agreements for some time now. There are many benefits to agreeing how assets would be divided in the event that you divorce. Providing both of you take independent legal advice and your agreement is kept up to date, the courts are very likely to be guided by what you agreed. But what if couples who like the idea of a pre-nuptial agreement are already married? In these circumstances, you could consider a ‘post-nuptial agreement’.
Why enter into a post-nuptial agreement?
There has been a rise in post-nuptial agreements in recent years – agreements, drawn up between a couple after they have married. A ‘post-nup’ is often prompted when one of the couple receives a windfall – perhaps an inheritance – that they would like to protect. It is also a useful mechanism to employ if a couple borrow money from family members, perhaps to buy a house. The couple that has borrowed the money can draw up a post-nup to recognise where the contribution to the home has come from. Where there are more complex family scenarios in place – for example where there are children from a previous marriage, a spouse who receives an inheritance may want to make sure that this money remains outside any divorce settlement in his current relationship, so that all his or her children may benefit. Anecdotally, we understand that post-nuptial agreements are also being used following marital infidelity as a means of restoring trust. It allows a spouse whose partner has cheated to ask for some security, in the form of an agreement about how assets and childcare will be divided, should there be a divorce. However, it must be remembered that the agreement should be fair in all the circumstances of the case if the parties hope to enforce it in the event of any later separation. Therefore, using any form of guilt pressure to obtain a better ‘deal’ is unlikely to be successful.
Although these are all sensible opportunities to draw up a post-nup, you don’t need to have a specific reason to do so. Many couples do not have the time or the opportunity to consider a pre-nuptial agreement. Following marriage, it may simply be part of general financial planning, in the same way that you would draw up a will to ensure your assets are properly dealt with on death. A post-nup can recognise a situation where one spouse gives up a career to care for young children
Drawing up a post-nuptial agreement
As with pre-nuptial agreements, post-nuptial agreements are not legally binding on a court, but provided they have been properly drawn up, it is likely that a divorce court would give its contents serious consideration.
- A ‘post-nup’ needs to be based on a full disclosure exercise, so all the relevant assets – both joint and individual – are considered within the agreement.
- Both spouses must take independent legal advice about the contents of the agreement and its consequences, including an understanding of any rights or entitlements being waived.
- The agreement needs to be drawn up so it isn’t unfairly weighted in favour of one or the other spouse.
- Both spouses must sign up to the agreement freely, without pressure from the other.
Although going through the process properly can make it a more expensive process, it is worth it to ensure that the court is more likely to follow the terms of the agreement in the unfortunate event that a divorce situation arises.
Clearly, a post-nuptial agreement won’t be necessary for every couple. On the other hand, it can be useful to know that it is possible for couples to create this sort of agreement after they have married should they choose to do so, or should their circumstances change.
If you’d like any advice about a post-nuptial agreement, we can help. As specialist family lawyers, we work with couples to draw up post nuptial agreements, as well as pre-nuptial agreements and also cohabitation agreements which can be vital to protect those living together but without the formality of marriage or civil partnership. Get in touch to find out more!