With 42% of marriages in the UK ending in divorce. While most couples are aware of pre-nuptial agreements, not many know about the less popular postnuptial agreement. In this blog, Davisons Law breaks down what a postnuptial agreement is, the process of it, and why it might be the right move for you.
What is a postnuptial agreement?
A postnuptial agreement is used by married couples looking for financial stability and certainty regarding protecting their assets following marriage. A postnuptial agreement is a legal document that is created after marriage, or a civil partnership has been entered and outlines how the financial matters and assets will be divided between the parties in the event of a divorce or separation.
Postnuptial agreements are different because they are signed after the marriage has taken place. Many couples opt to use postnuptial agreements to provide peace of mind regarding their financial matters, which covers them in the event of any significant changes in the relationship.
Are postnuptial agreements legally binding?
Postnuptial agreements are not automatically legally binding, but they can be enforced legally based on several factors. Courts will consider whether a postnuptial agreement should be enforced based on certain criteria being met.
The conditions the court will consider are whether the agreement was entered into freely, whether there was full financial disclosure, whether both parties received independent legal advice, whether the agreement meets the needs of any children and whether the outcome would be fair at the time of enforcement.
When both parties enter into the agreement, they must do it without pressure or influence from one party, and both parties must provide a complete and honest financial disclosure. Each party must have a clear idea of the other’s financial positions, assets, income, debts, and pension agreements.
If there are any children involved, then the courts will always prioritise decisions based on the child’s best interests. A postnuptial agreement cannot oust the court’s jurisdiction under the Children Act 1989, and any provision affecting children will only matter if it aligns with the child’s welfare.
A court will also not uphold any agreement that is unfair to one party or affects one party by failing to meet basic needs.
What does it cover and why should you get one?
A postnuptial agreement can cover all financial and property matters. The agreement will detail how all aspects of finances will be handled in the event of a divorce or separation. These include:
- Property and assets– The agreement will outline how all properties, investments, and business interests will be divided. This can include the family house, savings accounts and any other valuable possession made before or during the marriage.
- Debt management- The agreement will address any existing or future debt between the couple and how it will be allocated. This can help protect one party from being responsible for debts incurred solely by the other party.
- Pension arrangements- This agreement will specify how many pension benefits each party will be entitled to after divorce, which will help provide certainty about any retirement plans a party might have in the future.
- Spousal maintenance- The agreement could address whether either party will pay maintenance and, if so, how much and for how long.
- Inheritance and Family Assets- Postnuptial agreements can also help protect inherited assets or family wealth, ensuring they remain in the family or are passed down to children if one party wishes.
- Business interests- If a business has been established or expanded during the marriage, the agreement ensures business continuity and clarity about the ownership. This is to prevent disruption to the business during the divorce or separation.
The postnuptial agreement process
The process of creating a postnuptial agreement requires careful planning and professional guidance.
Step 1. Consulting a Family Law Solicitor
The process usually starts by consulting a family law solicitor who will provide advice on the postnuptial agreement and advise if it is appropriate for you.
Step 2. Financial Disclosure
After consulting with a family lawyer, both parties must provide full financial disclosure regarding all assets, income, debt, property, and pension provisions. Both parties will then seek independent legal advice from separate family law solicitors to ensure they fully understand the implications of the agreement and make sure each party’s needs are expressed fairly.
Step 3. Drafting the Agreement and Negotiations
The family law solicitors will then draft the agreement based on the discussions, clearly setting out the terms, and both parties will review it with their respective solicitors. At this point, negotiations might occur.
Step 4. Signing the Agreement
Once both parties are satisfied, the agreement will be signed.
It is advised to update and regularly update the agreement if there are any significant changes to the relationship, e.g., having a child, to ensure the agreement remains fair.
How much a postnuptial agreement costs.
There is no set cost for a postnuptial agreement. This is because it depends on the complexity of the agreement, the value and the variety of assets involved. Negotiation time can also add to the cost.
A well-drafted postnuptial agreement can save a lot of money in the event of a divorce as it will reduce legal disputes and provide a clear guideline for dividing assets.
How Davisons Law can help
Our expert team of family law solicitors at Davisons Law can help advise you whether a postnuptial agreement is best for you and guide you every step of the way should you feel it is the best step forward for your marriage. Get in touch today on 0808 3036 987.
