Pre-nuptial agreements and post-nuptial agreements

A pre-nuptial agreement is a formal agreement entered into prior to a marriage or civil partnership which sets out who owns what at the time of marriage and also how the couple envisage that those assets should be divided in the event of divorce or separation.

A post-nuptial agreement is exactly the same, but entered into after the marriage or civil partnership. Neither form of agreement is legally binding in England and Wales. However, following the recent landmark Supreme Court case of Radmacher v Granatino, the Court will now attach considerable weight to these agreements and hold parties to the terms agreed unless it can be proved that:

• the agreement was not entered into freely by each party
• the parties did not have a full appreciation of the implications of the agreement at the time of signing it
• it would be unfair to hold either party to the agreement

How to ensure your pre-nuptial or post-nuptial agreement is upheld

Whist the court is not bound to give effect to these agreements, it will be more likely to uphold the terms if the following steps are taken before entering an agreement:

• obtain independent legal advice – it is strongly recommended that each party to the agreement obtains independent legal advice from a Family lawyer who specialises in the drafting of pre-nuptial agreements and post-nuptial agreements prior to signing. This helps to show that you both understood the implications of the agreement when entering into it
• full and frank financial disclosure – full disclosure of your assets and income to your partner helps to show that you were both fully aware of the financial implications of the agreement. It is important that both of you have all of the information which is material to your decision, and that both of you intend that the agreement should govern the financial consequences of your marriage coming to an end. However, it should be noted that even where one person is indifferent to the particular details of the other’s assets and does not therefore insist upon full disclosure, the agreement may not be given reduced weight by the court because there was not full disclosure
• avoid allegations of duress or undue influence – the agreement must be entered into freely by both of you and there should be no evidence of duress or undue pressure before entering into the agreement. A usual safeguard against allegations of emotional pressure is that pre-nuptial agreements should be entered into at least 21 days before the marriage
• ensure the agreement is realistic and fair - if the pre-nuptial or post-nuptial agreement is weighted too far in favour of one person, there is less chance of it being upheld by the court on divorce. Whilst the reasoning behind signing a pre-nuptial or post-nuptial agreement often includes securing a more favourable financial settlement for one of you, it is still important to ensure that the agreement is realistic in light of current divorce law. The court is unlikely to uphold an agreement that would result in one of you being left in a predicament of real need, whilst the other enjoys an excess. Equally if the dedication of one of you to looking after the family and the home has left the other free to accumulate wealth, it is likely to be unfair to hold you to an agreement that entitles the latter to retain all that he or she has earned.