Pre-nuptial and post-nuptial agreements (which I refer to in this article broadly as “prenups” and “postnups”) are increasingly commonplace in England. Here at Morr & Co, enquiries for these have increased 10-20 fold. Why?
The three most likely reasons are:
Awareness. Coming into practice over 30 years ago, there was little talk of nuptial agreements: it just wasn’t done, even if you’d heard of them. Nuptial agreements happened among the stars and uberwealthy, or in Europe and America, not here in the UK. However, nowadays more people ask why the Royals do not have prenups than ask why so many people do.
The power of prenups has grown. Courts are less patriarchal in their approach than they were 30 years ago and are now far more willing to accept as binding the express wishes of couples signing such documents prior to or during their marriages.
Whilst they remain informative rather than strictly binding as to the outcome of financial splits on divorce, we have seen a huge shift in the caselaw, in favour of such agreements. In the 90’s they were barely acknowledged by divorce courts: now, almost the reverse applies, with courts generally seeking to uphold them, provided that well-advised parties signed up with full knowledge and understanding – unless, of course, they produce patently unfair outcomes or are otherwise problematic. Even where they do not succeed in full, they are more often than not, at least partially upheld.
Societal change. Marriage remains popular and almost half the cohabiting couples in England and Wales are married. However, there is a general move towards autonomy, self-determination and personal choice and a wish to dictate financial terms on marital breakdown can be seen as part of that.
As longevity has grown, lifespans now readily permit two or three marriages of 20+ years. Nuptial agreements have always been the primary domain of second and third marriages, where couples enter into relationships with a more practical understanding of marriage, a wish to avoid the costs and uncertainty they may previously have experienced, and an eye on protecting finances for children of previous marriages.
These days, international travel and foreign marriages are commonplace and prenups are standard-fare in most western cultures.
Top tips for creating a powerful prenup:
(i) Get a lawyer. This may sound self-serving but it’s not: if you cannot prove that the agreement has been entered into with full knowledge and understanding, there’s little chance it would stand up to challenge on divorce. Contractual issues cannot be ruled out e.g., mistake, misrepresentation and duress. If both parties are independently legally advised, it is much less likely that such factors might apply and each can be fatal to the agreement.
(ii) Financial disclosure must be exchanged. Unless you’re a billionaire, in which case the extent of your disclosure to the agreement would simply be “I’m a billionaire”. For most of us, the purpose of disclosing your finances at the start of the marital journey is to try to ring-fence assets away from the marital pool: no disclosure – no protection!
(iii) Allow thinking time. The existence of undue pressure or duress in any form can undermine a legal contract, prenups included. So it’s best to remove the innate pressure of the wedding itself. There is no deadline for the agreement to be signed pre-wedding. In 2014, the Law Commission’s proposed a minimum 28-day timeframe, but this seems to have fallen by the wayside in recent caselaw. The approach now tends to focus more broadly on the need for sufficient time for full advice and understanding to have been undertaken – the earlier the agreement was negotiated and signed before the wedding, the lower the likelihood of the wedding itself posing problematic pressure on either party.
(iv) Sign a postnup. It is possible to sign nuptial agreements before or after the wedding day, with postnups often viewed more favourably than prenups because the wedding induced pressure has gone.
(v) Keep it up to date. The birth of children, receipt of inheritance, ill health and other significant changes can all dramatically impact the efficacy of a prenup, and most have a default clause requiring updates every five years or so.
As with wills, it’s important that prenups reflect our current situations. If you’re thinking you need to update your will, you probably need to update your prenup too.
Divorces are often difficult. Entering into nuptial agreements before or during a marriage is not the only way to protect your position and minimise the stress and financial headaches of a difficult divorce, but they help.
If you have any questions or would like any further information on the content of this article, please do not hesitate to contact our Family team, who will be happy to help.