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What Is a Postnuptial Agreement and How Does It Work?

couples signing postnup agreement

A postnuptial agreement, or postnup, is a contract between two people who are married or in a civil partnership that sets out the ownership of assets and what will happen to those assets in the event of separation. Prenups are commonly used by high-net-worth individuals and those who want to protect their pre-martial assets, business, and/or inheritance from being taken by their spouse following divorce or dissolution. It is also common for individuals to enter into a postnuptial agreement if they have children from a previous relationship for whom they want to ring-fence assets. By entering a postnup, it is possible to avoid the possibility of disagreement over what should happen to certain assets because of a separation. 

Prenup vs. Postnup 

Prenuptial agreements (prenups) and postnuptial agreements are essentially the same. The main difference is that prenups are created before getting married or entering a civil partnership. Postnups are created by those who are already married or in a civil partnership. Couples may decide to create a postnup if they only realise the importance of signing a nuptial agreement after they are married. This may also be the case if one person receives a large inheritance during the marriage, which they wish to protect from their partner if they divorce.  

What can you put in a postnuptial agreement? 

Postnuptial agreements should always be carefully tailored to the specific needs of each couple. Postnups may set out: 

  • The assets that each party has brought into the marriage (including property, money, investments, business interests, personal possessions, and pensions) 
  • What separate assets and joint assets will be handled in the event of divorce 
  • How debts/liabilities will be handled relating to separately owned assets 
  • What will happen to any marital assets in the event of the death of one spouse – this may involve the surviving spouse waiving their property rights 
  • What will happen to the family home following the divorce 
  • Any financial provision by one party to the other following divorce 
  • Any financial provision for the children of the couple following divorce 
  • Payment of compensation by one party to the other following divorce if they have suffered economic disadvantage 
  • How joint gifts should be handled following divorce 

Crucially, the postnuptial agreement will make clear that neither party will make any claim against the other’s separate property in the event of divorce or estate in the event of death. 

Postnuptial agreements also include several clauses relating to confidentiality, the need for review, and when the agreement will come to an end 

How do you get a postnuptial agreement?  

To get a postnuptial agreement, it is important to seek advice from a family law solicitor who specialises in nuptial agreements. Both parties should seek independent legal advice. Your solicitor will explain the benefits of a postnuptial agreement and why this may be beneficial for you given your financial position.  

Before drafting your postnuptial agreement, your solicitor will explain the limitations and legal requirements for a postnuptial agreement (e.g., it must be entered into freely), gather a list of your separate and joint assets (financial disclosure), and help you to understand how these can be handled following divorce. It is essential that you and your partner fully and openly disclose your financial position, including any assets held, income and potential assets such as inheritances and any interests under discretionary trusts.  

Your postnuptial agreement must be freely entered into, set out in writing, signed by you and your partner, and be properly witnessed. The agreement will then be stored safely by your solicitor should it ever need to be used.  

Your solicitor will also advise when your prenuptial agreement should be reviewed to reflect changes in your life (e.g., if you have children or receive an inheritance during the marriage). 

Are postnuptial agreements legally binding in the UK? 

Postnuptial agreements are not legally binding in England and Wales. However, the courts will take them into account in most cases. The landmark Supreme Court case of Radmacher v Granatino in 2010 made it clear that a postnuptial agreement will hold up court if it is freely entered into by each party with a full appreciation of its implications. However, the court will not consider a postnup if it would not be fair to hold the parties to their agreement. This is why it is important to seek professional advice from a family law solicitor when entering into a postnuptial agreement. A specialist in postnuptial agreements will ensure that it is drafted correctly and will be considered by the courts in the event of divorce. 

The starting point for the courts is the law as set out in the Matrimonial Causes Act 1973, which requires judges to consider all the relevant circumstances of the case when deciding on how to divide the parties’ finances during divorce.  

It is important to bear in mind that a postnup cannot be used to override the law or prevent the judge from deciding on the most appropriate division of assets in a divorce. 

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