You may have heard of prenuptial agreements but not everyone is aware that you can sign a document that is similar in nature to a prenuptial agreement but completed after your marriage. It is called a postnuptial agreement.
A postnuptial agreement is entered into by a couple who are married or in a civil partnership and who want to record how their assets will be shared (or a specific asset, such as the family farm or business, will be ringfenced) in the event of their separation or divorce.
In this article, family law solicitor, Robin Charrot, answers your questions on what a postnuptial agreement is and whether they work.
When do you get a postnuptial agreement?
A postnuptial agreement is not limited to those who ran out of time to negotiate and sign a prenuptial agreement before their marriage or civil partnership. You can sign a postnuptial agreement whether you have been married a day, a year, or 31 years. It is therefore never too late to get family law legal advice about a postnuptial agreement.
It is a common fallacy that your husband or wife will only ask about a postnuptial agreement if they believe the marriage is in trouble. That is not true. Many happily married couples ask about postnuptial agreements, often triggered by a friend’s highly acrimonious divorce and a desire to avoid that type of dispute or because a life event has made them appreciate that a postnuptial agreement is just like precautionary insurance; sensible planning and a useful document to have.
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Should I sign a postnuptial agreement?
There are many reasons why you may consider discussing a postnuptial agreement with your husband, wife, or civil partner. Their initial response may be bemusement as many assume that postnuptial agreements are only signed by Londoners or those who mix in ultra-high net worth international jet-setting circles. If you do not have a yacht or a holiday home in the Caribbean you may think that a postnuptial agreement is out of your league.
As specialist family law solicitors based in Cheshire and North Manchester, we have seen a rise in inquiries about postnuptial agreements from across the Northwest of England. They help protect family wealth and minimise the emotional and legal costs of sorting out a divorce financial settlement dispute at the time of a separation or divorce.
The rise in popularity of the postnuptial agreement is a natural progression from the increased take up of prenuptial agreements.
Triggers for considering a postnuptial agreement include:
- An increase in marriages with non-British nationals and the acceptance of postnuptial agreements in some overseas countries as a usual step in marital planning
- The number of couples getting married later in life and acknowledging the need to take ongoing sophisticated legal advice given the extent of their assets and their desire to protect some of their wealth for children from earlier relationships
- Business owners wanting to protect business assets from the impact of a separation or divorce as without an agreement in place the court could be asked to order the sale of a business or shares
- The trustees of a discretionary trust wanting to make capital or income distributions to a beneficiary of the trust fund and raising the advisability of a postnuptial agreement to protect trust distributions
- The older generation who wants to start lifetime gifting to a son or daughter, having been advised of the inheritance tax advantages of estate planning by their private client lawyers or financial advisors, but who are wary of making substantial lifetime gifts unless they can be reasonably confident that their family money will not be given to their son in law or daughter in law in any divorce settlement
- Couples who entered into a prenuptial agreement and a change in life circumstances results in a need to change the terms of their prenuptial agreement
- Couples who contemplated divorce proceedings but decided to make a go of their marriage and, after having had some experience of the divorce financial settlement process, want to put a postnuptial agreement in place so that if they do end up splitting up there is less chance of costly and fraught divorce financial settlement court proceedings to split the assets
- Relocation to the UK or to another country and given the difference in divorce laws a recognition of the benefits of a postnuptial agreement setting out the jurisdiction for any future divorce as well as the split of money and other assets
Divorce solicitors are confident that in the future prenuptial agreements and postnuptial agreements will be seen as an essential part of life planning, in much the same way as taking out life insurance, signing a Will, finalising a Lasting Power of Attorney, or carrying out a regular investment portfolio review with a financial advisor.
Thinking about a postnuptial agreement
If you are thinking about a postnuptial agreement, it is best to be aware that there must be:
- An agreement with your husband or wife. There can be no element of duress or coercion
- Disclosure of current relevant financial and other circumstances
- Specialist legal advice taken by both husband and wife on their postnuptial agreement
If all those elements are properly ticked off and the agreement provides a fair split of the family assets the postnuptial agreement should be upheld by a divorce court in any subsequent divorce financial settlement proceedings.
Postnuptial agreements are individual to the couple and no agreement will be the same. That is why it is so important to get expert postnuptial agreement legal advice, whatever the reasons behind why you are contemplating a postnuptial agreement.