Pre-Nuptial Agreements and Post-Nuptial Agreements are contracts between people who intend to marry or have already married, dealing with what should happen to assets in the event of a divorce.
They are often used if either person wishes to protect assets that they have built up before the marriage.
They are more commonly used now and involve couples from all ends of the financial spectrum as many may have children from previous relationships and would wish to ensure they can make a Will providing a degree of certainty for their beneficiaries.
Traditionally, Courts in England and Wales did not see Pre or Post-Nuptial Agreements as binding. Their existence was considered by the Courts but in circumstances where the Court felt it appropriate, they may not have effected the outcome of a financial settlement on divorce.
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The case of Radmacher -v- Granatino changed this in 2010. The Supreme Court, in that case, upheld a Pre-Nuptial Agreement. The general principle to be taken from the case was that where there has been full and frank financial disclosure and both spouses have taken independent legal advice, it is likely that a Pre-Nuptial Agreement will be upheld.
This case does not mean that Pre or Post-Nuptial Agreements are all to be held as legally binding. In that particular case the assets were worth many millions. In circumstances where there are fewer assets, the needs of the spouses and any children may take precedence over the agreement if proper provision has not been made for them.
If however consideration is given to potential issues which might foreseeably arise and the agreement is reviewed at agreed intervals, a Post-Nuptial Agreement could update the original agreement to reflect changed circumstances and give the couple the certainty they sought at the outset.
To regulate your affairs on marriage or on remarriage. This can include agreeing how assets are to be dealt with during the marriage, on separation and divorce. One example is where a couple are engaged to be married. They had each been married previously and have children from those marriages and also assets such as property and savings. They may both agree that during their marriage they will keep their assets separate and in the event of separation they would retain their own assets for the benefit of themselves and their children in the future.
It is very important to consider a Pre-Nuptial Agreement well in advance of the intended date of marriage. Ideally, such an Agreement should be finalised and signed no less than 21 days before the wedding. We would suggest that advice should be taken on this issue at least 6 months before the date of the wedding which gives you both sufficient time to consider the terms of the Agreement and to take advice from solicitors.
If you have already married and want to provide for what should happen to your assets you can enter into a Post-Nuptial Agreement at any point.
There is no doubt that discussing what should happen in the event of separation can be difficult but it is important to consider whether it would be sensible to enter into a Pre-Nuptial Agreement. The outcome would be that, in the unfortunate occurrence of divorce, both spouses will have protected the assets that they had built up or acquired prior to the marriage, providing certainty for the couple and their wider family.
Provided you have both given full information about your finances and have taken advice from solicitors, it is likely that a Pre-Nuptial Agreement will be upheld by the Court. In some circumstances courts can vary the contents of such an Agreement if the marriage has been a long one and circumstances have changed significantly since marriage. Even in such circumstances the Agreement can be influential on the outcome. Provision can be built in for the Agreement to be reviewed.
There was no doubt the 2010 Supreme Court decision of Radmacher significantly changed the status of pre-marital agreements although it stopped short of making them automatically binding on parties. However, it did establish that under the right set of circumstances 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 their agreement…” The upshot was that unless it was deemed wholly unfair to hold a party to the agreement, then the agreement should stand. In Radmacher, they applied this test and found that a properly executed pre-marital agreement was a decisive factor in reaching their decision.
Following on from Radmacher, a set of criteria developed to make clear what could be held as “freely entered into” and with “full appreciation of its implications”. The latter was achieved by ensuring both parties had the opportunity of taking legal advice, that each had provided full and frank disclosure. What was slightly less straightforward was establishing that the agreement was “freely entered into”. As a starting point, there should be no evidence of duress or misrepresentation. Equally that there is a requirement that any pre-nuptial agreement should be entered into at least 21 days before the marriage ceremony in order for it to be regarded valid. It remains good practice to ensure a longer period of time between signing and the ceremony but that it is not too long before as to potentially warrant the agreement being considered out of date.
This brings us to the case of S v H  which serves as a clear reminder that there remains very strict parameters in which a court will be willing to accept the validity of a pre-nuptial agreement and therefore its capability of being upheld or its terms recognised within a financial settlement imposed by a court.
S v H involved a couple who were both entering a second marriage. 5 days prior to their marriage they had an agreement drawn up by a foreign notary. Neither took independent legal advice. After their marriage broke down the wife (S) sought to rely on the Agreement. The husband (H) having gone bankrupt, sought to avoid the agreement being upheld as it would have severely restricted the financial support he could receive from S. The parties’ evidence was totally at odds as to their level of understanding of the agreement they signed. H said he was taken by surprise by the visit to the Notary and at being asked to evidence his assets. HHJ Booth considering the case, found the Agreement, not unsurprisingly to be invalid. Judge Booth highlighted that there was no formal process of disclosure, no legal advice taken or given and it was only signed 5 days before the wedding took place.
However, the Judge went on to make it clear that regardless, the agreement would not have met the husband’s needs in any event. As such, the agreement failed on all three fronts that the Supreme Court felt was required to uphold a valid agreement.
The parties were married just over 10 years which considering the length of marriage, they had time to re-evaluate the agreement and correct the defective original agreement by entering into a post nuptial agreement but for whatever reason never had referred to the document again until their divorce. It is always sensible to include a review provision and to ensure the parties keep their pre-nuptial arrangements under scrutiny so that, if necessary, any redrafting can take place to record specific changes or upon significant events such as a birth of a child, loss of work or disability. What S v H highlights very clearly is the need to not only ensure the formalities are followed when an agreement is executed in order for it to be held up as being valid, but that throughout the lifetime of the agreement, it is continually reviewed to ensure it remains useful in the event of divorce.
If you would like more advice on how to protect your assets either in the contemplation of marriage or possibly post marriage, please contact us on Ipswich 01473 213311 or Colchester 01206 584584 or email us [email protected], alternatively if you would prefer us to call you please visit our web site and click “Call Me Back”.
If you would like to know more about this process or feel this could be something you would benefit from, please contact us at [email protected] or telephone Ipswich 01473 213311, Felixstowe 01394 834557 or Colchester 01206 584584, where we will be happy to speak with you.
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