You may have heard of either pre or post-nuptial agreements. Each agreement can play its part at certain stages of a relationship and importantly they can hold some weight in law.
A pre-nuptial agreement is made before a marriage or civil partnership. Often, they are made because one party to the relationship brings a great number of assets into it. For example, one of the couple may already own property, or hold greater cash wealth for whatever reason. A pre-nuptial agreement can be made between the parties as to what should happen to assets on any relationship breakdown.
A post-nuptial agreement can achieve the same outcome. Parties can agree to a split in the assets and enter into this form of agreement. The advantages are that it can prove cheaper and somewhat quicker to distribute the assets after a relationship breakdown. There are pitfalls however that must be borne in mind.
Are they legal? Do they stand up in court?
The answer to this is more complex. Pre and post-nuptial agreements may stand up in court provided that both parties have freely entered into the agreement. Both sides must have a full appreciation of the implications of the agreement they are entering into and the agreement must be fair.
The first point is probably reasonably easy to prove. If each party took independent legal advice on the agreement it may be said that they have freely entered into the agreement. The same can be said for the second point that the parties must have an appreciation of the implications of entering into the agreement.
The third point, that the agreement must be fair in all circumstances is harder to pin down. There is no obligation before entering these agreements for there to be full and frank financial disclosure between the party, which may lead to one or other party hiding assets from the other in the hope that they are not discovered if the relationship breaks down. In the circumstances where it has come to light that there perhaps were significant assets un-disclosed at the time of the agreement, it could be argued that the resulting agreement was unfair.
What are the pitfalls of these agreements?
Any party to one of these agreements must note however that any pre or post-nuptial agreement between parties cannot override the jurisdiction of the court and its ability to apply the factors a court must consider to any financial settlement. The family court has significant freedom to vary any agreement put before it for judgment, to change parts of it, or impose a completely different settlement if the circumstances warrant it.
Because a court may in certain circumstances override what is agreed between parties, it is often the case that money spent getting a nuptial agreement can then be spent again in court action. This risk can be reduced with effective, early legal advice on any pre or post-nuptial agreement.
There are circumstances when a nuptial agreement might suit a client’s needs and requirements either before a marriage or civil partnership and after a breakup. They can be a cheaper alternative to court and protect a client’s position. The key to a good nuptial agreement is good quality legal advice before entering into and agreeing on the terms of such an agreement.
Contact Farnfields’ experienced team of family law specialists to discuss your options and understand the type of agreement that could work for you. As our offices are not currently open to the public, please do call on (01747) 825432 to arrange a consultation or make contact via our website www.farnfields.com.