Prenuptial and postnuptial agreements are agreements reached between a couple that wish to set out their financial and legal rights in the event that their relationship breaks down. The only main difference between the two is when they are entered into: a prenuptial agreement is entered into before a marriage or civil partnership ceremony, whereas a postnuptial agreement is entered after a marriage or civil ceremony.
Presently, pre and postnuptial agreements are not absolutely binding in this country. The court still leaves matters in the hands of any district judge on a marital breakdown, who has a wide discretion to make orders on various factors. Although one factor taken into account is any prenuptial or postnuptial agreement, it is not necessarily conclusive – the judge takes into account any changes in the nature of the relationship, for example in relation to children, employment needs and resources.
Essentials for any Pre or Postnuptial Agreement
It is, therefore, imperative that certain minimum safeguards are met to give a pre or postnuptial agreement the best possible chance of success. Those guidelines include:
- provision must be made for children;
- both parties should have taken independent legal advice;
- both parties should seek independent accountancy advice;
- neither party should feel pressurised into entering into the agreement;
- the agreement must be fair;
- full financial disclosure must have been made;
- the agreement must have been drawn up at least 21 days prior to the marriage; and
- the agreement should include clauses allowing it to be reviewed on certain events, like the birth of a child
It will not, therefore, be sufficient to leave entering into a prenuptial agreement until a week before the wedding, as this will simply be too late. You should also bear in mind that changes to the family situation and dynamics can alter a pre and postnuptial agreement, which the court will closely consider when deciding whether the terms of the agreement should be applied or not.
The Future – Qualifying Nuptial Agreements?
The law in relation to prenuptial and postnuptial agreements is developing. As well as being considered by the UK Supreme Court, it was also the subject of a law reform project. This project led the Law Commission to recommend the introduction of “qualifying nuptial agreements” (i.e. pre and postnuptial agreements) as enforceable contracts.
The Law Commission proposed that these agreements should enable couples to make binding arrangements for the financial consequences of divorce or dissolution, thereby allowing them to contract out of the court’s assessment of fairness, provided certain requirements are met (these include independent legal advice, full disclosure and on the basis that the agreement was not made within 28 days immediately before the wedding or civil partnership ceremony). The UK Government has since stated that it is considering the introduction of qualifying nuptial agreements as part of its wider consideration of private family law reforms. We are watching this issue closely, and will keep our clients informed of all developments.
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