Nuptial agreements are becoming increasingly common with couples choosing to marry later in life (and so they have each accrued assets prior to the relationship), or those marrying for a second time (and so they don’t want to split their assets again!) For individuals with businesses, inherited wealth, family assets, or children from previous relationships, a nuptial agreement can provide clarity, reduce uncertainty in the event of separation or divorce and they can negate the potential for significant legal costs, stress and worry in the longer term.
What is a pre-nuptial agreement?
It is a legal agreement made between two individuals in contemplation of marriage setting out how the couple wish their assets to be divided between them in the event of separation or divorce. It can also set out how they will arrange their finances during the marriage. It’s also known as a ‘pre-marital agreement’.
What is a post-nuptial agreement?
It is the same as a pre-nuptial agreement but made between a couple who are already married. It is sometimes known as a ‘post marital agreement’. The agreement can be drafted and entered into at any point during the marriage, for example after a significant life event such as having children, receiving an inheritance or building a successful business.
Are nuptial agreements legally binding?
No, they cannot override the courts discretion to determine how to fairly distribute the marital assets. However, when considering all the circumstances of the case, the existence of a nuptial agreement is a relevant factor the court will consider. When entered into correctly a nuptial agreement will carry considerable weight in the Court’s discretionary exercise.
The leading case law decision on nuptial agreements is Radmacher v Granatino [2010] and in considering what weight should be attached to a nuptial agreement the court held “The court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to the agreement”.
Recent decisions following Radmacher show judges consistently upholding properly executed nuptial agreements, unless the terms are considered to be unfair by failing to meet a party’s needs. Whilst nuptial agreements are not binding, courts give them significant weight when freely entered into with full appreciation of their implications, independent legal advice, and adequate financial disclosure.
What is required for fairness?
The agreement must be freely entered into
The parties must enter into the agreement of their own free will, without undue influence or pressure. If there is any evidence of duress, fraud, misrepresentation or unconscionable conduct, the agreement is unlikely to be upheld.
The parties must have a full appreciation of the implications of the agreement
Each party must be in possession of all the material information required to make an informed decision to sign the agreement. Independent legal advice is strong evidence of a party’s understanding of the implications of the nuptial agreement. The parties should be aware of the other party’s assets and income to fully appreciate the terms and implications of the nuptial agreement.
It must be fair to hold the parties to their agreement in the circumstances prevailing
Any agreement that compromises the reasonable needs of a child is unlikely to be upheld by the court. Likewise, the court is unlikely to enforce an agreement that leaves one party in genuine financial need while the other remains comfortably provided for. Provided that both parties’ needs are adequately met, an agreement that seeks to protect or “ring-fence” assets acquired before the marriage or received from an external source during the marriage is generally likely to be regarded as fair.
How our family lawyers can help
Given the complexities surrounding nuptial agreements and the significant financial consequences they can have in the event of a relationship breakdown, it is essential to seek specialist legal advice before entering into any agreement. Properly drafted and carefully considered agreements are far more likely to achieve their intended purpose and withstand scrutiny by the court. Our experienced matrimonial solicitors provide clear, practical advice tailored to your individual circumstances, helping you protect your assets while ensuring that any agreement is fair and robust. If you are considering entering into a pre-nuptial or post-nuptial agreement, contact our specialist family & matrimonial lawyers to discuss your options and obtain expert guidance.