Prenuptial agreements, often referred to as ‘prenups’, are legal documents that couples sign before getting married, outlining the division of assets and other financial matters in the event of divorce or separation. Postnuptial agreements are, conversely, signed after the date of the marriage and usually some years later. 

While nuptial agreements have been more commonly been associated with certain jurisdictions like the United States, their popularity is growing globally, and are now being entered into more frequently in England & Wales in order to provide greater certainty for couples.

Many people do not like to think about what might happen in the event that their marriage fails at some point in the future. Discussing financial issues can be one of the most difficult aspects of marriage. However, dealing with this from the outset can strengthen a relationship and can reduce the need for contentious litigation if you can record what you both agreed would be a fair division of your finances upon divorce.  

At Laytons ETL, we are highly experienced at advising and assisting you in negotiating the terms and substance of a pre-nuptial and post-nuptial agreement. 

A Pre-Nuptial Agreement is an agreement between two people about to enter into a marriage or a civil partnership, setting how they plan to divide their property and asset in the case of divorce or civil partnership dissolution.

As a matter of English Law, Pre-Nuptial Agreements are not automatically binding as they cannot oust the jurisdiction of the  English Court. The court does retain its powers to make financial orders on the breakdown of a marriage, as they see fit. However, following the landmark case of Radmacher v Granatino in 2010, the case law in this area confirms that the courts are increasingly upholding and/or giving substantial weight to a pre-nuptial agreement if certain conditions are complied with before it is signed and the agreement is “fair”. 

There is nothing in UK law which prohibits you from protecting your property on divorce by having a properly drawn up pre-nuptial agreement. If you want to protect and safeguard your assets and have certainty from the outset of your marriage on how your finances will be structured and divided if you later divorce, our advice is to get a pre-nuptial agreement.  

A pre-nuptial agreement is a contract entered into before marriage by a couple which outlines how they will organise their finances during the marriage and how they would wish to divide their money and property if they were to get divorced. A post nuptial agreement is similar but is entered into after the marriage takes place. Both operate in the same way and have the same legal consequences.

If you do not get a pre-nuptial agreement and your marriage breaks down, you may not be able to protect or “ring-fence” certain assets. Many couples are able to resolve their financial issues by agreement, often with the assistance of solicitors and/or mediators. A significant number, however, are unable to achieve a resolution by agreement and they need to ask the court to resolve their differences and adjudicate upon asset and income division. 

The Courts in England and Wales operate on wide discretionary basis, where each case is considered by its own particular circumstances, with reference to factors the court considers under Section 25 of the Matrimonial Causes Act 1973, known as “the section 25 factors”. There is no standard formula for calculating appropriate financial provision on divorce, instead the court has a duty to consider “all the circumstances of the case” together with the section 25 factors. The court’s general approach is to calculate and then distribute the parties’ available resources between them to achieve a fair outcome. In practical terms, this means the starting point for financial division on divorce is 50:50 unless there is good reason to depart from the assets being shared equally. 

Although often considered unromantic, a carefully drafted pre-nuptial agreement is a sensible way of starting your marriage which a shared sense of transparency and honesty and will give you and your partner the freedom to agree your own terms without a solution being imposed upon you by the court. 

You should consider getting a pre-nuptial agreement, particularly in the following scenarios:

• If there is disparity of wealth between the parties prior to marriage, for example, if you have substantially greater capital or income than the other party 

• If you have a business and you wish to protect your future profits. 

• If you have received inheritance or have significant inheritance prospects or may benefit from gifts from your family. 

• If you have pre-acquired assets to the marriage, such as inherited property, heirlooms, or trust assets and you both agree that anything acquired prior to the marriage remains the property of that spouse. 

• If you have a child(ren) from a previous relationship or marriage and you want to protect these family members by making a provision for them especially if entering into a second or subsequent marriage. 

• If you have any international ties, or a connection with another country and want to mirror the terms of any agreement drawn up in a foreign jurisdiction 

• If you have debts or want to protect yourself from your partner’s debts limiting your liability if your intended spouse has outstanding borrowing prior to marriage. 

• If you or your partner are giving up a potentially lucrative career to care for the family and want to make a provision for compensation for loss of career 

The Courts have indicated that in order for an agreement to be considered fair, the following will be taken into account:

• Legal Advice 
  Both parties will need independent legal advice before entering into the agreement to ensure they understand what they are entering into and what they are giving up. It is usual for the economic stronger partner to pay the legal fees of the economically weaker. 

• Financial disclosure  
  Full and frank disclosure of your financial circumstances, summarised in schedules to the agreement, is required. Listing your income, assets and liabilities at the outset of the relationship makes it less likely for a party to accuse the other of concealing their assets later on.  

• Timing
  Both parties need to have enough time to consider and reflect the terms if the proposed agreement, with the benefit of legal advice. We advise that you sign it at least 28 days prior to the date of the wedding. If there is not enough time, we advise that it is best that you sign both a pre-nuptial and post nuptial agreement to evidence your intention to be bound by its terms. 

• No duress, undue influence or misrepresentation 
  Both parties must enter into the agreement freely and not as a result of improper pressure or exploitation of a dominant position by the other party. 

• The agreement must be fair 
  The terms of the agreement are fair to the extent they meet the basic needs of both party’s in the event of a divorce. Fairness is judged at the time of the breakdown of the marriage and involves crystal ball gazing. Regular periodical reviews or review clauses to deal with events such as involuntary loss of employment, illness, disability which affects the ability to work should be included.  

• International element 
  In many other jurisdictions nuptial agreements are both common place and legally binding, if you have a connection to a jurisdiction outside of the England and Wales or hold property/ assets abroad it is vital we consider the effect of the agreement in other jurisdictions that may be relevant to the parties. 

• Have the legal formalities been followed?  
  The agreement must be contractually valid and executed as a deed, which includes that it must be witnessed by an independent witness 

• New Wills 
  Marriage automatically revokes any existing Will unless prepared in contemplation of it. We advise that parties both prepare new wills to reflect their changes status and the terms of the proposed nuptial agreement. 

If, in the event of a divorce, one of you no longer wishes to be bound by the terms of the pre-nuptial agreement, but the other person does, that person may make an application to the court for the other party to explain why an order should not be made in the terms of the agreement. Whether the court will uphold the agreement in full or in part will depend on the facts of a particular case and therefore, you should not enter into a pre-nuptial agreement unless you intend to be bound by the terms of that agreement.