When planning a wedding and future together, divorce is the last thing on a couple’s mind. However, with around half of all marriages ending in divorce, people are increasingly opting to draft up a pre-nuptial agreement before getting married or a post-nuptial agreement once married, and for good reason.
Divorce can be an emotionally and financially draining time, so deciding how to divide your resources at a time when you are both working towards shared future goals can save a lot of stress if you later decide to separate or potentially divorce. Pre-nuptial agreements can also help to provide clarity and security, even though you may hope to never have to rely on it.
What is a Nuptial Agreement?
A pre-nuptial agreement is a legal document entered into by two parties prior to marriage that sets out how the couple intends for their assets and liabilities to be divided between them, should they separate and/or decide to divorce in the future. Agreements may also set out how the couple wishes to deal with their assets during their marriage. A post-nuptial agreement essentially deals with the same matters, but is entered into once you are already married or after you have separated.
A pre or post-nuptial agreement cannot overrule the jurisdiction of the court and the factors that a judge must consider under the Matrimonial Causes Act (2005 Revision) if parties later go on to divorce, but it can be a ‘magnetic factor’ and guide the judge as to the appropriate outcome in each case.
For a pre or post-nuptial agreement to be upheld, it must satisfy the legal test set out in Radmacher, that is to say that each party (i) freely entered into the agreement without undue pressure, (ii) obtained independent legal advice prior to entering into the agreement, (iii) was informed of the full implications of entering into the pre-nuptial agreement, and (iv) there was full and honest disclosure of both of parties’ assets. The agreement must also be validly drafted pursuant to the laws in the jurisdiction where it is to be applied.
A nuptial agreement should also include a review clause, and it is good practice for the document to be reconsidered whenever any significant change occurs, for example, on the birth of a child or the receipt of a large inheritance by one spouse.