There has been a lot of chatter about prenuptial agreements over the last few months. Will Prince Harry and Meghan have one? Has Cheryl Cole and Liam Payne got one? Aren’t they just for the rich and famous? It’s interesting because I do not think any of that sort of conversation would have hit the main stream media, say, 4 or 5 years ago at most. Most of these types of agreement also have a confidentiality clause in them, so you would not hear about them at all, even if they were made.
There was a very significant case in family law decided back in 2010 about prenuptial agreements and how they were viewed by our English and Welsh Family Court. What’s all the fuss about, you might well ask. Well, in a nutshell, the way our law is framed gives the court the final ‘say’ over what is going to happen with financial resources when couples divorce. What a prenuptial agreement does is sets out the agreement the couple have made about what is to happen over their finances if they were to divorce… and so their agreement attempts to take the place of what a judge might do. In other words, it tries to put the decision of the couple above the decision of the court, which is not how our law works.
Since 2010, there have been a number of cases looking at prenuptial agreements and how they should be dealt with if a case comes before the court. We have had the report of the Law Commission (started in 2009 and published early 2014) that recommended changes to our law regarding prenuptial agreements and their effect. The law has not been changed, what with Government (I am sure) being pretty busy with other issues at the moment. However, the judges have developed the case law nearly as far as they can go, in my view, without there being a change in the law so that where we are now, is that prenuptial agreements are as binding and effective as they can be (if done correctly – and that’s important) without the law changing.
So, what’s the difference between a prenuptial and post nuptial agreement? Prenuptial agreements are done at least one month before the marriage. Post nuptial agreements are done after the marriage.
Prenuptial agreements are most common where
- one party has inherited wealth and the other hasn’t or is wealthier than the other
- The couple are marrying at a time when they have both already financially established themselves and want to keep what they have accumulated out of the matrimonial sharing ‘pot’
- The couple are marrying for a second time and want to protect assets/inheritances for children from a first relationship.
Having a prenuptial agreement does not mean your marriage is doomed from the start. It’s a bit like an insurance policy, I suppose. Tucked in the drawer and only pulled out if you need it.
A post nuptial agreement is one made after the marriage. You sign them when a prenuptial agreement is made to mirror the agreement before marriage (a quirk of the law) but also, I think, they have a place if there is a dramatic change in finances – such as an inheritance- or if there have been ‘wobbles’ in a relationship and you both want to try again but are a little bit cautious.
Prenuptial and post nuptial agreements seem to have a rather ‘Marmite’ effect for people – they either love the idea or hate the idea. The bottom line is, though, that it is only if the marriage breaks down generally that they get looked at again. There is an argument for saying that they should be reviewed regularly but most people don’t want that, I have found. For some people who have been hurt before or seen others hurt, it can give comfort in moving forward.
These can be complex agreements, depending on what you want to do. They just require a bit of thinking and experienced, specialist guidance to point you to the issues or options to consider and then to put your solution into an agreement. If you want to know more or to discuss something like this, contact me. We offer to fixed fees for the preparation of prenuptial and post nuptial agreements.