What are Prenuptial and Postnuptial agreements?

A financial agreement between an engaged or already married couple might not seem the most romantic gesture, but with divorce a possibility, it’s a practical step that is often worth taking.

Both Prenuptial and Postnuptial Agreements are legal tools that serve to outline each partner’s financial rights and responsibilities, and are a useful aid for dividing assets in the event of a marriage ending.

While both serve a similar purpose, there are some key differences in how they work, which we will explore here.

What is a Prenuptial Agreement?
Most people recognise the term ‘Prenuptial Agreement’ – or ‘Prenup’ – from its frequent mention in high profile divorce cases. However, they are not solely for use by Hollywood stars and A-listers.

In the UK a Pre-Nuptial Agreement is a legal document drawn up between a couple before marriage to outline how their assets will be divided between them in the event of a divorce or separation.

Assets such as property, debt, and income are usually covered, to help couples avoid any financial surprises if the relationship were to break down. These types of Agreements are more likely to be put in place when a partner already has or is likely to acquire, more assets than the other. 

What is a Postnuptial Agreement?
Also often shortened to ‘Postnup’, this works in the same way as a Prenuptial Agreement, but is drawn up once a couple is already married. This can be due to a number of reasons, such as:

• Career advancement – where one partner’s salary significantly increases
• A partner receives inheritance
• A business venture requires asset protection
• Where marital difficulties occur and couples are concerned about a potential separation

Can you have both a Prenuptial and a Postnuptial Agreement?
Yes. A Prenuptial Agreement that is amended once a couple is married is also referred to as a Postnuptial Agreement. As above, a couple would usually amend their Prenuptial Agreement if either or both partners’ circumstances significantly changed after the wedding.

What do Prenuptial and Postnuptial Agreements include?
An Agreement usually includes an inventory of your assets and details on how you and your partner wish for them to be looked after during your marriage, as well as how they will be split should the marriage break down. 

The Agreement usually includes:

• Property held in your sole name or joint names
• Savings held in bank accounts
• Premium Bonds
• Inheritance
• Stocks and shares
• Pensions pots
• Income
• Business

However, if there are any assets which you would prefer not to be divided between you and your partner, these should be detailed in your Agreement.

What are the benefits of a Prenuptial or Postnuptial Agreement?
The main benefits are that each type of agreement provides clarity for couples around how their assets will be divided in the event of a relationship breakdown.

A typical agreement can help to:

• Avoid uncertainty and arguments over finances
• Protect children’s inheritance or specific assets
• Preserve assets for any children from previous relationships
• Protect inherited money, assets or savings
• Give both parties a choice on how the assets are split
• Allow one partner to retain full control of a business and
• Protect from partner’s debt.

Do Prenuptial and Postnuptial Agreements hold up in Court?
This is a particularly complex area of law. However, although courts are not compelled to uphold Prenuptials or Postnuptials, they are viewed as a serious indicator of a person’s intentions in the event of a marriage breakup.

Therefore, an Agreement is still worthwhile – they can be persuasive in court, providing the required safeguards are put in place and the agreement is reasonable and fair for both parties on separation. For this reason, it’s essential to consult a legal professional to ensure your agreement is properly drafted and fair.   

Do I need a Prenuptial or Postnuptial Agreement?
You should consider drawing up an agreement before you get married if you want to determine how your property and finances will be dealt with if you were to separate.

Nobody enters a marriage thinking it could end – but an Agreement can provide invaluable peace of mind if it does.