Family Law Managing Associate Julie McCrery from our Derby office discusses how pre-nuptial and post-nuptial agreements can help safeguard family wealth, provide greater financial certainty and reduce the risk of costly disputes in the future.
What are pre-nuptial and post-nuptial agreements?
A nuptial agreement is a written agreement between a couple about their finances.
A pre-nuptial agreement is signed before a marriage or civil partnership takes place. A post-nuptial agreement is signed after the marriage or civil partnership has already begun.
The agreement records what the couple would like to happen to their money, property and other assets if they later separate.
Because every couple’s situation is different, when I draw up pre and post-nuptial agreements I make sure each one is tailored to the clients’ individual circumstances. I advise clients not to regard a nuptial agreement as a “one size fits all” solution.
Why might someone consider a nuptial agreement?
Nuptial agreements are often associated with celebrities and high-net-worth individuals, but they can be useful for many different families.
I see many clients who would benefit from a nuptial agreement because they want to protect:
- money or property inherited from relatives
- a family business built up over many years
- assets owned before entering the relationship
- wealth they hope to pass on to children or grandchildren
Having these conversations early can help both parties understand each other’s expectations and avoid uncertainty in the future.
Protecting family wealth
One of the main benefits of a nuptial agreement is that it can help identify assets that one or both parties would like to keep separate.
This is particularly important where wealth has been passed down through generations. Families often want reassurance that inherited assets, trusts or business interests will remain protected if a marriage unfortunately comes to an end.
While every case is different, a well-prepared nuptial agreement can be strong evidence of the couple’s intentions and can play an important role if financial matters ever need to be resolved.
I find that many people are surprised to learn that, in the absence of a nuptial agreement, the starting point for the courts when considering the division of assets on divorce is on the basis of a 50:50 split. Potentially therefore this includes all assets whether held in the parties’ joint names, their respective sole name and also assets that may be held by some other person but in respect of which one or other party retains an interest. Having a nuptial agreement in place therefore gives the parties the opportunity to reflect their wishes and intentions at an early stage and to protect assets that might otherwise be vulnerable to sharing.
It’s worth remembering, however, that any agreement must be fair. The needs of both parties, and particularly any children, will always remain an important consideration.
When should an agreement be put in place?
I always recommend to clients having an agreement in place early on.
To give a nuptial agreement the best chance of being upheld, both parties should:
- receive separate legal advice
- be open and honest about their finances
- have enough time to consider the agreement properly
- enter into it willingly, without pressure from the other person
For pre-nuptial agreements, it is generally recommended that the document is signed at least 28 days before the wedding or civil partnership ceremony.
Are pre-nuptial agreements legally binding?
Many people are surprised to learn that pre-nuptial and post-nuptial agreements are not legally binding automatically in England and Wales.
However, that doesn’t mean that they’re ignored.
The courts are increasingly willing to uphold these agreements where they have been properly prepared, both people understood what they were signing, and the outcome would be fair.
This means that a carefully drafted agreement can carry significant weight and may have a major impact on how finances are dealt with following a separation.
Looking to the future
Life changes. A family business may grow, an inheritance may be received, or a couple’s financial circumstances may look very different several years after they marry.
That’s why some couples choose to enter into a post-nuptial agreement after marriage, even if they didn’t have a pre-nuptial agreement beforehand.
Whatever your circumstances, taking advice early can help you understand your options and put the right arrangements in place for the future.
The earlier you seek advice, the more options are available to you. By planning ahead, you can help protect family wealth, reduce uncertainty and avoid potential disputes in the future.
Julie is a Resolution Accredited Specialist in Complex Financial Remedies on Divorce and is also an Accredited Specialist in Pensions on Divorce. In addition she is a trained Collaborative Lawyer. Together with our experienced Family Law team, she advises individuals, families and business owners on pre-nuptial and post-nuptial agreements tailored to their circumstances.
To discuss how a nuptial agreement could help protect your assets and your family’s legacy, contact our Family Law team on 03456 465 465 or email enquiries@rotherabray.co.uk
Disclaimer: This blog is for information only and does not constitute legal advice. If you need legal advice, please contact us on 03456 465 465 or email enquiries@rotherabray.co.uk to get tailored advice specific to your circumstances from our qualified lawyers.
