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Postnuptial Agreements

Most people are already familiar with prenuptial agreements. Also known as prenups, these initially gained prominence in Hollywood amongst the rich and famous who wanted to protect their wealth in the event of a divorce, but gradually this was adopted as a fairly common preliminary to marriage for high net worth individuals.

However, prenups can only be entered into before marriage or civil partnership – and this is where postnuptial agreements come in.

What is a postnuptial agreement?

A Postnuptial Agreement (‘Postnups’) is essentially the same as a prenuptial agreement – but with the distinction that they are formed after the marriage or civil partnership has taken place.

Both prenups and postnups consist of a contract, entered into by a couple, which sets out how the assets of each party (eg property, savings, pensions etc) should be distributed in the event of a divorce (or dissolution of civil partnership).

The aim is to try and keep assets separate rather than allowing them to become mixed together in the ‘matrimonial pot’ – and consequently to minimise the possibility of divorce-related financial disputes ending up in court.

Are postnuptial agreements legally binding?

Currently postnuptial agreements are not legally binding in the UK. Courts are not forced to follow the instructions contained in postnups (or prenups); they can determine that assets have been added to the matrimonial pot and how these should be divided notwithstanding the terms of any postnuptial agreement.

But just because courts are not bound by postnups, they will generally take them into account – so they can still be very useful. The landmark Supreme Court case of Radmacher v Granatino came up with the following guidance for family courts to follow when deciding whether to enforce prenuptial or postnuptial agreements:

“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.”

What this essentially means is that:

  • Each party should take independent legal advice before entering into a postnup and they should not feel under duress etc.
  • Both parties should understand the full extent of any financial claims they might be giving up by signing a postnup (eg any hidden wealth can reduce the effect of an agreement).
  • There is an overriding duty of the court to ensure that the needs of both parties – in particular where children are involved – are met.

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What can be included in a postnuptial agreement?

Some of the common elements of postnups include:

  • Matrimonial home – a couple may decide in advance who will be entitled to remain, or if the property should be sold, if the marriage breaks down.
  • Property portfolios and inheritances – note that inheritances or property owned before marriage are sometimes automatically kept out of the matrimonial pot (see our separate artical on Inherited assets and divorce).
  • Maintenance – if one partner is in a stronger financial position, they may agree in advance to support the other party in the event of divorce.
  • Savings, shares and pensions – the full extent of these should be stated up front.
  • Business assets – particularly important if one party already has significant business interests before marriage.

How do I create a postnuptial agreement?

The first place to start for couples considering a postnuptial agreement is to make a list of all their assets and how these should be split between them in the case of separation, along with any intentions regarding maintenance payments etc.

Many clients believe they can use an online template to create their agreement, however, although these are a great way to discover the basics involved with the agreement, they need to be within a particular way to be legally binding.

Creating a postnup is a fairly straightforward process which can be carried out by family solicitors. It is also possible to use online services – such as Divorce Online – to form an effective agreement, generally at lower cost.

Things to bear in mind when creating a postnup

  • Children – courts will always prioritise the needs of children in a divorce, so a postnuptial agreement should take account of their financial needs.
  • Legal advice – independent legal advice should be sought by each party before signing postnups.
  • Wealth – postnuptial agreements are generally more useful for high net worth individuals and couples.
  • Prenups – couples who decide to change the terms of an existing prenuptial agreement can revoke this and create a postnup instead.
  • Review – postnups should be periodically reviewed to see if they require amending.

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Post Nuptial Agreement FAQs

Do I need a postnuptial agreement or prenuptial agreement?

postnuptial agreement is a written agreement executed after a couple gets married, and a prenuptial agreement is an agreement excuted before a couple get married. 

Ideally couples should have an agreement in place before they get married however if they do not have enough time to have one executed a postnuptial agreement is recommended.

Can you write your own post-nuptial agreement?

A postnuptial agreement needs to meet the legal requirements set by the law. An individual without any legal experience will be unable to draft the documents in such a way.

Should I sign a post-nuptial agreement?

You should NEVER sign a post-nuptial agreement without seeking legal advice. It’s essential to ensure that you are signing a fair agreement.

You may feel that you will never divorce so you don’t need to worry, however, you never know what the future holds.

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