By Islam El-Sakka
Postnuptial agreements are becoming more common among younger couples looking to safeguard money gifted by parents, as the "Bank of Mum and Dad" hands down record sums. Signing a postnup is increasingly viewed in the same practical light as writing a will, particularly at a time when both partners in more marriages tend to be financially independent.
Legal recognition increasing
Emma Harte, family partner at Keystone Law, said the UK has moved towards greater legal recognition of prenups and postnups over the years. "When I first qualified, prenups and postnups weren't that common, but over the years, they have become more prevalent," Harte said. The ultimate goal is to provide clarity and prevent protracted legal battles, making separations more amicable and less expensive.
Purpose and common triggers
A postnup aims to ensure that if a divorce or separation occurs, the couple has already agreed on financial outcomes, reducing extra costs and arguments. Harte noted several triggers: some couples sign after a marriage has broken down, such as following an affair, to give the relationship another try with financial certainty. Others create a postnup early in marriage if they missed a prenup, or use both as a "belt and braces" approach.
Protecting family wealth and new assets
Postnups are designed to protect family wealth, second marriages, or assets brought into the union from prior business ventures. They can also address new financial changes like an inheritance or a significant increase in wealth. Harte gave examples: inherited money or a family business can be ring-fenced, and parents who contribute financially may want their contribution protected if the couple later divorces.
Difference from a prenup
The distinction is simply timing. A prenup is entered into before marriage; a postnup is entered into after the marriage has taken place.
What the agreement covers
Tailoring a postnup is complex and must adapt to each couple's circumstances. Generally, agreements ensure sufficient housing and income provisions for both partners and any children, including childcare and school fees. Couples also agree on the division of joint or sole assets such as cars, furniture, holiday homes, and pets, as well as future inheritances. Agreements should ideally account for life changes like the birth of children or career shifts, and may need review by foreign lawyers if the couple moves abroad.
Legal enforceability
Postnups are not automatically legally binding, but courts now increasingly take them into account. A judge will consider whether both parties had independent legal advice, provided full financial disclosure, and entered the agreement without pressure or time limits. However, an agreement cannot completely exclude a spouse from all assets; courts may override provisions deemed unfair to ensure the needs of a spouse or children are met.
Seeking professional advice
Before instructing solicitors, couples can use a mediator to help reach amicable terms, as discussions involving families can be sensitive. The mediator must be impartial. Once terms are agreed, a family solicitor or specialist can draft the formal document.
