You may have heard about the rise of pre-nuptial agreements. Pre-nuptial agreements are agreements which are entered into prior to a parties’ marriage to set out arrangements for what will happen with a couple’s finances in the event that a couple separate.
What is a Post-Nuptial Agreement?
Post-nuptial agreements are now also becoming more and more common. These are agreements which are entered into after a parties’ marriage, again with the intention of setting out what might happen with a couple’s assets in the event that they separate.
These agreements are often attractive for people who are seeking some certainty on what will happen following a separation if there is to be one. This is because the law which governs division of parties’ assets on separation in England and Wales is the Matrimonial Causes Act and factors which are set out within section 25 of that Act. The application of these factors and the weight given to each factor is discretionary and it can be difficult to predict the outcome without legal advice. However, there is concern that such agreements are not worth entering into in this country due to them not being strictly legally binding.
What do the Courts say?
In the case of McLeod v McLeod [2008] UKPC 64, post-nuptial agreements were found by Baroness Hale to be… ‘Very different from pre-nuptial agreements. The couple are now married. They have undertaken towards one another the obligations and responsibilities of the married state. A pre-nuptial agreement is no longer the price which one party may extract for his or her willingness to marry.’ (Para 36).
This suggests that a post-nuptial agreement might be more persuasive than a pre-nuptial agreement. However, Baroness Hale’s comments were made before the landmark decision of Radmacher [2010] UKSC 42, which meant that, provided that certain stipulations are met, pre-nuptial agreements are found very often to be decisive.
The decision of Radmacher confirms that the Court can attach weight, even decisive weight, to a pre-nuptial or post-nuptial agreement. The Supreme Court decided that if such an agreement was to carry full weight, then there needed to be have been:
• No undue influence or pressure or parties;
• They have to have been informed and understand the legal implications of the Agreement; and
• Exchange of financial disclosure, information or advice.
Often, such agreements are entered into where one party has more significant assets than another. These Agreements now no longer have reduced weight just because one party is aware of its implications but is indifferent to the possible effect of it. All of the circumstances and facts of the case will be relevant. This includes the timing of the agreement, the parties’ ages, sex, whether the marriage would have gone on without an agreement and many other elements.
What about my Children?
What should be noted, and is reassuring, is that an post or pre-nuptial Agreement cannot affect the potential provision that might be made for the reasonable needs of children of the marriage. This ensures that the paramountcy of the needs of the children of the family is not affected.
There is also best practice guidance in terms of ensuring that such agreements are reviewed regularly.
Conclusion
If you are looking at having some greater certainty in relation to your relationship and are aiming to enter into or continue on in a marriage with clarity on what may happen, should there be a breakdown of the marriage, a pre or post-nuptial agreement is definitely something to consider. They prevent you from relying upon the discretion within the existing divorce law, may provide one party with greater assets than they might be likely to receive if the Matrimonial Causes Act were relied upon, but are chiefly of value in certainty for parties.
Next Steps…
If you are interested in pre or post- nuptial agreements or need further advice, please contact our Family Law team on freephone 0800 011 6666 or via email legal@timms-law.com.
