A Prenuptial agreement (also known as a prenup) is an agreement entered into between parties before they marry which seeks to set out what will happen to the assets of the parties should they divorce.
They are, of course, not a romantic document. But they may be entered into by parties especially where one side has a significantly larger asset base than the other. They are often used by parties who have been through a divorce previously and who wish to avoid some of the pain if things go wrong again.
Whilst not binding on the Courts of England and Wales, they have been described in higher Courts in a recent case as the "magnetic factor". They diminish in importance the longer the marriage subsists and in our view have a limited lifespan.
Whilst fairness and the needs of the parties dictate the Courts discretion, it has been noted that Judges do, if possible, like to hold people to the bargains they have made subject to certain contractual criteria having been met upon which we can advise you. These will include the time of the agreement (in the case of prenups not less than 21 days prior to the marriage and preferably not less than 4 weeks), the absence of duress, full and frank disclosure of financial matters and the opportunity to take independent legal advice.
Whilst such agreements may not provide an immediate knockout blow, the Courts have shown they are prepared to reduce potential awards even if not holding the parties to the letter of the agreement.
Postnuptial settlements are agreements reached by parties after marriage breakdown again made in an attempt to avoid battles at Court.
These can concern separating spouses or civil partners. Separation agreements are the same thing but include agreements reached between separating cohabitants. They do not bind the Court from making a different decision to the division of assets that may have been agreed within the document. However, subject to certain criteria being met, such as full and frank disclosure of all the assets of the marriage/civil partnership/relationship, the benefit, or at least opportunity to take independent legal advice in the absence of fraud or mistake, the Court does like to hold people to their bargain.
The Court potentially exercises much greater discretion in relation to divorcing couples and couples dissolving their civil partnership but should one party seek to break the agreement, the Courts have shown themselves to be fairly robust. Whilst not necessarily holding a party to the terms of settlement, they have awarded less than would otherwise have been the case.