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Get expert advice on prenuptial or postnuptial agreements

Prenuptial agreements (also known as premarital agreements) can sometimes be considered unromantic but can be extremely important to protect your assets in the event of the breakdown of your relationship. Likewise, a postnuptial agreement to protect assets acquired during the course of a marriage. Our experienced solicitors can guide you through the process.

At the beginning of, or during, your relationship discussions concerning what would happen should matters break down may be difficult to discuss. However, giving thought to such issues at the outset is both a sensible and pragmatic way of protecting yourself for the future, particularly where there may be an imbalance of assets now or anticipated in the future, or you have monies you would wish to ring-fence from a previous relationship.

Should things go wrong, you will have a clear idea of where you stand and there is a documented account of your intentions at the time you married.

Legal status in England and Wales

Prenuptial and postnuptial agreements are not legally binding in England and Wales as this would require a legislative change. However, they are persuasive evidence in financial proceedings, especially if certain safeguards are adhered to.

The Supreme Court case of Radmacher shifted the balance so that it is extremely likely in the future a prenuptial agreement will be upheld by a court unless it can be shown that doing so would be unfair to the other party in the circumstances at the time of the divorce.

The Law Commission has also reported on prenuptial agreements and recommended that they should be largely upheld provided that they meet the needs of both parties.

The safeguards that should be adhered to can be summarised as:

  1. The agreement meets contract law criteria (no fraud, undue influence or misrepresentation);
  2. the agreement is signed as a deed no less than 28 days before the wedding;
  3. Both parties must have been informed of its implications, appreciated those implications and considered (and ideally sought) legal advice;
  4. Both parties have made full disclosure of their assets and resources.

Legal status in Scotland

Prenuptial agreements are treated differently in Scotland and are considered legally binding.

Prenuptial agreements have been used in Scotland for centuries. They have a long history in Scotland and have always been recognised as valid agreements. They have been used in Scotland since the Middle Ages to regulate financial arrangements during marriage and on divorce.

Validity of prenuptial agreements in Scotland

Prenuptial agreements have been recognised as valid in Scottish courts for some time and provided they are prepared and signed properly, they will be recognised and deemed valid in the event of any divorce. The Family Law (Scotland) Act 1985 specifically recognises that the parties to a marriage might have already reached an agreement pre-marriage or during their marriage.

The court is required to take into account any agreement when deciding if they should make any financial order in the divorce. The courts in Scotland are unlikely to interfere with the arrangement set out in an agreement unless there is a very good reason to do so, such as the agreement not being entered into fairly or with the appropriate capacity.

The test for challenging the validity of any agreement in Scotland is a high one. Provided the agreement has been entered into openly and without coercion, it is very difficult to overcome that hurdle. Accordingly, a well-drafted prenuptial agreement will provide considerable protection and financial certainty for any person going into a marriage.

Who should consider a prenuptial agreement?

Prenuptial agreements are typically associated with celebrities and the super-wealthy, but the reality is quite different.

They are growing in popularity with entrepreneurs, people with shares in a limited company, those with a stake in a family business, and those entering into second marriages.

Equally, those who have received an inheritance (be it large or small) may feel that this money should be considered separately to matrimonial assets.

It may be the protection of future shareholdings or a future windfall that is the motivating factor, or ensuring that children from a first marriage do not lose out on their inheritance as a result of a divorce.

How to structure a prenuptial agreement

A prenuptial agreement is intended to set out the couple's agreed decision about what should happen to their assets if they get divorced. They can be as in-depth as the couple requires.

They can cover everything down to the last detail, including who will keep specific items of furniture and how much child maintenance should be paid (even if the couple do not have children yet). For other couples, an agreement might simply record that one party's share of inherited property is to be treated separately in the event of a divorce, but the split of all other assets will be decided upon if and when needed.

A couple may understandably not always be in a position to predict what they will have at the point of a hypothetical divorce. In those cases, prenuptial agreements often record principles. For example, a couple may choose to agree that all property bought in joint names during the marriage will be shared equally. Review clauses can also be used so the agreement is reconsidered at the date of significant events, such as at the birth of a child.

Although many agreements are entered into prior to marriage (prenuptial agreements), postnuptial agreements (those entered into after marriage) are equally effective.

International marriages and prenuptial and postnuptial agreements

Different countries will take different approaches to prenuptial and postnuptial agreements and it should not be assumed that an English or Scottish court will uphold a German agreement or vice versa.

A couple from different countries, planning to live abroad, or with assets held overseas may need a prenuptial agreement in more than one jurisdiction and in more than one language. We can guide you.

Changing circumstances

A prenuptial and subsequently post nuptial agreement must keep pace with any changes in the parties' circumstances, and regular reviews, whether formally or informally undertaken, should take place.

Even though some cases successfully challenge prenuptial and postnuptial agreements, in full or in part, and so there is no absolute guarantee of success, these agreements are a powerful tool in limiting claims on divorce, even if it cannot be guaranteed that the claims will be limited precisely along the same terms as provided for in that agreement.

Frequently asked questions

  • Why do I need a prenuptial agreement if they are not 100% binding in England and Wales?

    They are not 100% binding as this would require a change in the law/statute, but they are very likely to be upheld if the agreement meets the criteria that it was entered into freely, with both parties fully appreciating the implications of the agreement, and it is fair to hold the parties to the agreement in the prevailing circumstances at the point of the divorce.

    Prenuptial and postnuptial agreements are a powerful tool in limiting claims on divorce, even if it cannot be guaranteed that the claims will be limited precisely along the same terms as provided for in that agreement.

  • Are they expensive to set up?

    Not necessarily. The cost of a prenuptial agreement will vary, depending on how complicated the couple's situation is, their assets, and what they can agree. It is also essential both parties take separate legal advice, so there will also be two sets of lawyers' fees.

  • How should a couple discuss a prenuptial agreement?

    It is recommended that they are open and honest with each other about the outcomes they fear and what they can agree is fair. Often questions arise during discussions that the couple may not have even considered.

    A prenuptial agreement can only be entered into with both parties’ agreement so it is important that they are both fully involved in the discussions rather than leaving it entirely to lawyers.

  • Prenuptial agreements and declarations of trust – is there much of a difference?

    Declarations of trust are usually associated with, and limited to, property purchases made before marriage. They typically set out and define each party's contribution to the price of a house, particularly when one contributes more towards the deposit, and how the proceeds of any sale would be divided between them.

    In most cases, however, the protection offered by a declaration of trust is lost if the parties get married and the court has the power to decide what should happen to the equity in the property. A prenuptial agreement could be designed to set out the same criteria and continue this protection.

  • What happens if I do not sign a prenuptial agreement?

    If the marriage proceeds without a prenuptial agreement, a financial settlement on divorce will be determined by reference to the s25 factors.

    If there is no prenuptial agreement, and no marriage, in the event of relationship breakdown, you will be reliant on the limited remedies available to cohabiting couples.

  • Why are prenuptial agreements considered valid in Scotland but not legally binding in England and Wales?

    Scotland has a different legal system to that in England and Wales. Both countries have different laws applicable to family law cases particularly Divorce. Prenuptial agreements in Scotland have been recognised as valid contracts for centuries and therefore will generally be upheld by the courts if entered into properly.

    It has been a long-held tradition in Scotland to recognise a person's right to contract with another person and the courts have been loathe to interfere with that right even in a divorce situation.

    In England and Wales, the courts have taken a different approach but are now giving considerable weight to any prenuptial agreements when determining cases.

  • My parents are planning their estates for inheritance purposes and propose to make a large lifetime gift to me. What should I do?

    If you are already married, you should discuss with your parents whether they intend for both you and your spouse to benefit from their lifetime gift, or any future inheritances on death, or whether they would prefer it to be ring-fenced in your favour in case there are relationship difficulties in the future.

    If the family would prefer it to be protected, you should consider a postnuptial agreement, entered into prior to your receiving that gift.

  • I am planning to remarry. We both have adult children and grandchildren, and don’t know what to do if we split up

    You should be open with each other and talk about what you would intend to happen if you were to pass away or if the relationship broke down. It might be that the answers to these questions are different.

    We can help you weigh up what is important to you and your family, and ensure that you protect those who are important to you through a prenuptial agreement and estate planning/Wills.

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Emma Collins
Emma Collins

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+44 (0)345 073 9900 Email Emma

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