Post-nuptial agreements – are they effective?

It may be that you are going through a difficult patch in your relationship and want to establish some agreement about outcomes should the relationship breakdown. Or perhaps it is simply the case that your financial (or other) circumstances have recently changed; you would like to try to ring-fence a particular asset or agree a principle upon which you will both decide what happens should you separate at some point in the future. You may want to consider a post-nuptial agreement.

Alongside the increase in interest in pre-nuptial agreements, the past five years have seen a significant surge in interest in post-nuptial agreements in England and Wales.

Post nuptials are agreements made between a couple during their marriage (i.e. after their wedding, but before separation) which aim to govern the division of the couple’s finances (and also perhaps other areas of concern they may have) should they divorce.

Of course these are delicate matters – like pre-nuptial agreements, post- nups are entered into by couples who see their future together, so there is a difficult balance to be acheived here in getting an effective agreement in place whilst not causing damage to the relationship.

So are these agreements actually effective if the marriage subsequently breaks down; will they be enforced by the courts on divorce?

The fact is that pre-nuptial and post-nuptial agreements are treated in a very similar way by the courts: although they are not binding, and so will not necessarily be followed by a court if the couple seeks to rely on it during a divorce, they will often be given decisive weight when a judge divides a couple’s assets on divorce. Like pre-nuptial agreements, where a post-nuptial agreement has been freely entered into by the parties, who understand its consequences, the court will give effect to it unless it would be unfair to do so.

However, this test is clearly subjective, and therefore it is often difficult to predict the outcome in each case with any great degree of certainty. The reality is that each case should very much be decided on its own facts, and great care has to be taken when drafting and negotiating these agreements to ensure that the circumstances are right to give the agreement the best possible chance of being enforced. For instance, where a husband or wife has been pressurised into signing a post-nuptial agreement (perhaps the agreement is the result of an ultimatum imposed by one party) or if he/she has not been given legal advice, a court may be reluctant to apply the agreement. The terms of a post-nuptial agreement are likely to be considered unfair if they do not provide for the needs of one of the couple or the children.

Despite the difficulties though, a pre or post-nuptial agreement can be very valuable in the right situation; where someone brings prized assets into the relationship (acquired before or even during the marriage) or perhaps where a party has children from a first marriage and wants to set aside some property for their benefit.

We can advise on the terms and the creation of a post-nuptial agreement, we can assist with negotiations and we can draft agreements which are likely to be followed by the courts. Please do not hesitate to contact our team if you would like to discuss this further.

Contact Lara Wulwik (née Phillips)
lara.wulwik@smab.co.uk