Pre and Post Nuptial Agreements
What is a nuptial agreement?
A nuptial agreement is a contract between two people who are bout to marry or enter into a civil partenrship (pre-nuptial agreement) or between two people who have just married or former a civil partenrship (post-nuptial agreement). The purpose of the agreement is to record how matters should be dealt with if the marriage or civil partnership breaks down. To that end, it regulates matters such as financial provision, children, inheritance and so on.
Most people are reluctant to make these agreements as they are often seen as unromantic or pre-emptive. However, since the structure of families has changed considerably over the last two or three decades and there are more second and third families, many people are now making these agreements.
Why should I make a nuptial agreement?
A nuptial agreement is usually made when both parties get along with each other and care about each other. As a result, it is made in an environment which is not hostile or confrontational. As a consequence, the terms contained within the agreement are likely to be sensibly considered and emotionally detached. If and when a marriage or civil partnership breaks down, by having a nuptial agreement, you can avoid the animosity that often follows such a breakdown, as well as the time and expense of court proceedings. However, before you take the step of having a nuptail agreement, you should have an a nuptail agreement, you should have an understanding of the current law relating to these agreements.
Is my nuptial agreement binding?
In many countries across Europe and in the USA, nuptial agreements are enforceable contracts. In the UK, despite considerable media attention, nuptial agreements are not legally binding and cannot override the powers of a court. However, recent case law has suggested that more weight will be given to the agreements if they are prepared in a specified way, giving protection to the parties. Even then, such agreements are only one of the factors which will be taken into account by the court if there is a breakdown of the marriage or civil partnership.
When drafting a nuptial agreement, regard must be had to the following factors:
- There should be full and frank financial disclosure between the parties. This should enable both of them to understand that the terms which will apply if the relationship breaks down.
- Both parties must enter into the agreement freely and without pressure from any third-party. The parties must understand the terms of the agreement that they are signing.
- The agreement must set out provision for the reasonable equirements of any children of the family. If the agreement does not make such provision, then it is unlikely that any part of the agreement will be taken into account by the court.
- It is important that you try and anticipate all future contingencies and make provision for them in the agreement. Such an agreement is more likely to be binding and be regarded as fair.
- Both parties should seek independent legal advice before signing the agreement.
If the above conditions can be met, there is further flexibility that is available to the parties. For example,if the parties agree terms which a court would not necessarily make on divorce or dissolution of the civil partnership, that in itself would not enable the court to set aside the agreement. This therefore gives some control to the parties about their respective futures. In addition, the parties can exclude various assets from any subsequent division of matrimonial assets, such as assets acquired before the marriage or civil partnership, or assets inherited during the course of the relationship.
In particular, regard must be given to the pressure on either party to sign such an agreement. It is always recommended that the agreement is finalised several months for the date of the marriage or civil partnership, all within a short time of the parties getting married or forming a civil partnership. By signing the agreement several months before the magic date, both parties will be given ample time to consider their position rather than having to sign an agreement at short notice simply because they have so much else to deal with.
What does the future hold?
There appears to be a trend towards the acceptance of nuptial agreements and this trend has accelerated in the last few years. It is therefore likely that this area of law will continue to develop and consequently, nuptial agreements will be more and more difficult to set aside. However, this observation is based on the trend of case law which is not necessarily binding. Until and unless there is legislation to regulate the validity of nuptial agreements, there will always be a doubt as to whether they are binding or not. It is always best to follow the above guidance when making a nuptial agreement.