Discussing the possibility of a marriage ending in divorce is never an easy conversation. However, with 42% of marriages in England and Wales resulting in divorce, it is crucial to protect your assets for the future.
Prenuptial and postnuptial agreements allow couples to decide in advance how their assets and finances will be managed in the event of a divorce. But what is the difference between these two types of agreements?
What is a prenuptial agreement?
A prenuptial agreement, often called a prenup, is a contract that couples enter before marriage. This type of contract is known as a pre-registration agreement for couples in a civil partnership. The main purpose of a prenup is to outline financial arrangements and asset division in the event of a future divorce.
The Law Commission recommends signing prenups at least 28 days before the wedding. This timeframe allows both parties to consider their individual and mutual financial situations without undue pressure or influence.
What is a postnuptial agreement?
A postnuptial agreement is similar to a prenuptial agreement, but it is created after a couple has married.
What can be included in a prenup or postnup?
The following can be included in a prenup or postnup agreement:
- Income, including future income
- Assets including but not limited to property, investments and overseas interests, plus any gains on such assets
- Personal belongings and other chattels
- Debts, including payment of any outstanding debts
- Expectations of any gifts and/or inheritances
- What will be covered in Wills in the event of death
- Insurance coverage
It must be clear whether the accounts are in individual or joint names and whether they were acquired before or during the marriage.
What are the benefits of having a prenup or postnup?
Negotiating a prenuptial agreement before getting married may feel uncomfortable, but having one in place can save significant money in the unfortunate event of a divorce. Since the division of assets is already outlined in the prenup, it can help avoid lengthy and costly court battles later on.
Similarly, discussing a postnuptial agreement with your partner can also be challenging. Nevertheless, it can help reduce conflict during a divorce and minimize expensive legal fees should that situation arise.
Both types of agreements provide certainty and peace of mind. Nuptial contracts are significant for couples with differing financial situations, those with children from previous relationships, or individuals expecting to receive a substantial inheritance.
Are prenups and postnups legally binding?
In England and Wales, nuptial agreements are not yet strictly legally binding. If couples decide to divorce, the court must be completely satisfied that the contract was created correctly when it was signed. The court also has the authority to assess whether the agreement is fair to both parties. It may challenge issues such as:
- Is the deal fair for both parties?
- Were either party pressured to sign the agreement?
- Did both parties fully understand the implications of signing the agreement?
- Did both parties provide full financial disclosure of their assets?
The court can impose a financial settlement, even if this does not lead to changes in the existing agreements.
However, when a nuptial agreement is drafted correctly, these contracts hold significant weight and are the most effective way to safeguard your financial assets during a divorce.
How can a Solicitor help with prenups or postnups?
At Harrington Family Law, our Family Law Solicitors are specialists in preparing and negotiating the terms of pre and postnuptial agreements. If you wish to set up or check an agreement to protect your assets in the event of divorce, our experienced team can provide valuable support. For more information, contact us on 01484 810210 or email info@harringtonfamilylaw.co.uk.
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