Prenuptial agreement (also known as a prenup) is an agreement entered into by both parties before they marry. It might be entered into in instances where one party has a significantly larger asset base than the other. A Prenuptial agreement seek to outline out what will happen to the couple's assets should they divorce.

Do Prenuptial Agreements work?

Whilst they are not binding in England and Wales, prenuptial agreements can be very persuasive and upheld if they meet specific requirements. However, their importance diminishes the longer the duration of the marriage and in our view, they have limited lifespans.

Whilst fairness and the parties' needs dictate the Courts' discretion, prenuptial agreements can be upheld if they need certain requirements. These will include the time of the agreement (in the case of prenups no less than 21 days prior to the marriage and preferably no less than 4 weeks), the absence of duress, full and frank disclosure of financial matters and the opportunity for the parties to take independent legal advice.

Furthermore, the Courts have shown they are prepared to reduce potential awards, even if not holding the parties to the letter.

Postnuptial Agreements

Postnuptial agreements are another option for parties. They are agreements entered into by parties after marriage. Their purpose is to outline how the parties' assets will be divided if they separate or divorce in an attempt to avoid battles at Court.

It has now been clarified that there is no difference in legal status between pre and post nuptial agreements.

Separation Agreements 

Separation agreements are agreements reached between separating cohabitants, whether married, in a civil partnership or cohabitants. They do not bind the Court from making a different decision about 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 Courts can uphold the agreement set out in a separation agreement.

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 arrangement, 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.