Many couples, particularly those where one partner has greater wealth, assets or business interests than the other, will enter into a prenuptial agreement prior to marriage. A prenuptial agreement is designed both to protect the parties’ interests should the marriage be dissolved in the future, enforce the separating of joint and individually owned assets that are brought into a relationship.
With increasing regularity however, people are considering the relative merits of postnuptial agreements. As the name implies, a postnuptial agreement is written after a couple is married and, again the primary intention is to separate joint and individual wealth, and assets.
Why are postnuptial agreements necessary?
Postnuptial agreements are typically used to simplify financial affairs in the event of a future divorce, or should an individual’s circumstances materially change after they are married.
They are of particular use when either party has children from a previous relationship, whom they wish to safeguard in the event that their current relationship breaks down, or they pass away.
A postnuptial agreement is also the legal document of choice when either party receives an inheritance that they wish to retain individually, rather than to intermingle the inheritance as part of joint matrimonial property.
A postnuptial agreement may serve to protect a family business from dissolving in the event of a marital breakdown, by clearly articulating roles and responsibilities, as well as determining which partner will retain control of the business in the event of a divorce.
In some cases, a couple who did not believe they needed a prenuptial agreement will opt for a postnuptial agreement, having experienced living together and determining that their financial values do not align as expected.
What should a postnuptial agreement include?
A postnuptial agreement is a bespoke document and unique to your particular circumstances. It can include anything that you wish and even go beyond financial provision, to include an agreed division of household chores and childcare responsibilities, and to detail the agreed solution to any parts of married life that are proving contentious.
To increase chances of it being legally binding, a postnuptial agreement should be drafted in consultation with an experienced family law solicitor who will ensure that both parties understand the terms, conditions and implications of the agreement, and witness the signatures. They may recommend that other elements of estate planning are undertaken at the same time, such as drafting or updating wills to reflect the marriage and any material changes resulting from it.
Donna Goodsell comments that as it is impossible to know what the future holds, to clearly articulate your wishes on paper is a wise decision that can solidify a marriage, ensure clarity in the event of a later divorce and act as an important part of estate planning. This is particularly useful for second marriages or where either party has children from an earlier relationship.