I have just read a thought provoking article in the Guardian entitled “the rise of the postnuptial agreement: ‘My husband behaved like a rutting stag’“. I have to confess that as a specialist family finance solicitor, with many years of advising on the preparation of prenup and postnup agreements, my eye is always drawn to articles on family law. However, if I am totally honest on this occasion the reference to stags made me click and read on.
The article says that postnup agreements are on the rise and gives the views of a number of leading London family lawyers on the subject of the phenomenon of the postnup. I can anticipate many people reading the article and saying ‘’may be postnups are the in-thing in London and in ultra-high net worth international jet setting circles but I bet a postnup agreement is as rare as hens’ teeth in the North ‘’.
Not so. I’ve seen a rise in enquiries about postnup agreements from across the Northwest of England. When I first started out as a family solicitor the majority of my time was spent in resolving financial claims on separation and divorce but over the years I have increasingly been asked to prepare agreements to protect family wealth and to minimise the emotional and legal costs of sorting out financial disputes at the time of divorce. In my view, the rise of the postnup agreement is a natural progression from the increased popularity of the prenup agreement. I put the surge of enquiries about postnups down to a number of reasons including:
- People becoming more aware of the option of a postnup agreement through media articles or the widespread reporting of wrangles over celebrity postnup agreements, such as Colin Montgomerie’s divorce and highly publicised postnup:
- The marrying of partners from other countries and the acceptance of postnup agreements in those countries as a usual step in marital life;
- 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.
The postnup agreement certainly isn’t the preserve of celebrities or the ultra-high net worth. I have seen a rise in postnup enquiries from:
- Business owners who want 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;
- Trustees wanting to make capital or income distributions to a discretionary beneficiary and raising the advisability of a postnup to protect trust distributions;
- The older generation who want to start lifetime gifting, having been advised to do so by their private client lawyers or financial advisors because of the tax benefits of doing so, but who are wary of making gifts unless they can be reasonably confident that their family money won’t come into any divorce settlement;
- Couples who entered into a prenup agreement and a change in life circumstances mean that a postnup agreement is the most sensible option to record what they now want to happen if they split up;
- Couples who contemplated divorce proceedings but decided to make a go of their marriage and after having had some experience of the divorce process now want a postnup agreement in place so that if they do end up splitting up there is less chance of a costly and fraught Court case 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 postnup agreement setting out the jurisdiction for any future divorce as well as the split of money and other assets.
Nowadays I am frequently asked if it is worth doing a postnup agreement. Invariably my answer is yes and that prenup, cohabitation and postnup agreements are all just sensible planning, in much the same way as taking out life insurance, signing a Will or carrying out a regular investment portfolio review with a financial advisor. In future years I believe that our attitude to postnups will be such that when a couple sit down to think about reviewing their Wills, investments or insurance policies the postnup agreement will just be another document to review and put to bed.
The Guardian article “the rise of the postnuptial agreement: ‘My husband behaved like a rutting stag‘” features interviews with reportedly embittered spouses who’ve using postnup agreements as a means to get a better deal on divorce following their husband or wife committing an ‘indiscretion’. The wronged spouse was therefore in a position of power to negotiate a better split of the assets in their favour. A word of caution; preparing a postnup agreement is just like entering into a prenup agreement:
- There has to be an agreement with no element of duress or coercion;
- Disclosure of relevant financial and other circumstances;
- Both husband and wife should take specialist legal on their agreement.
If all those elements are properly ticked off and the agreement provides a fair split of the family assets the postnup agreement should be upheld by a divorce Court. All those elements can be tricky and that’s why I am often asked about the ‘what ifs and maybes’ when drawing up a postnup.
Postnup agreements are individual to the couple and no agreement will be exactly the same as the next couples’ agreement so that’s why it is so important to get legal advice, whatever the reasons behind why a postnup agreement is being discussed.