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Pre-nup, post-nup, what nup?!

Prenuptial and postnuptial agreements are increasingly considered a sensible part of financial planning for the future. Prenups are made before the marriage and set out what would happen financially upon marriage breakdown. Postnups are used in a similar way but they are entered into after marriage. The marriage does not have to be in difficulty at this stage and they can be used in conjunction with, or to complement a Will.

But are they binding?

Judicial decision in the Family Court increasingly supports the enforcement of those agreements that have been entered into properly. Of greater gravitas is the Law Commission’s recent draft bill to introduce prenuptial agreements into the law, and therefore make them fully binding. The recommendation is aimed at providing the general public with certainty and understanding that entering into a prenup actually means something. The alternative is to leave it to the family lawyers to argue out, based on previous case law, which invariably leads to regional inconsistencies in judicial decisions about enforcement.

This doesn’t mean that families can enter into an agreement that will impose hardship on one party and essentially there is no ability to opt out of either party’s obligation to any children of the family.

It does mean that agreements can look to achieve the following:-

  • Predictability concerning the division of gifts and inheritances.
  • Definition of interest in family businesses
  • Preservation of separate assets to care for parents or children of previous relationships or the support of the parties.
  • General avoidance of the uncertainty and expense of a judicially imposed outcome.

Business Preservation

Defining how family business interests are to be dealt with, especially those that have been in the family for multiple generations, is a very sensible use of a prenup or postnup. 

Prenups can ring fence business interests by determining that all assets acquired before the marriage should be retained by Husband and Wife respectively and only assets acquired after should be shared equally. In addition, Company books should record that business interests are run independently. Families should consider sharing ownership with wider family members because the Court will be more careful to ensure that their interests are not prejudiced and the business will not be treated so readily as part of the matrimonial pot.

Any pre-nuptial agreement must now be signed no less than 28 days prior to marriage. In addition, such agreements must be reviewed and we recommend that this is done every three to five years or when there has been a significant change in circumstances. An example of this might be diagnosis of a major or terminal illness. A postnup can be used to preserve, for example, Husband’s business for his adult children and avoid a scenario whereby they are competing with their stepmother’s claims. This doesn’t mean that Wife will be left with nothing, a postnup can address these issues and give certainty to the children of a first marriage and the Husband’s second Wife.

By way of a different scenario if one of those adult children themselves enters into marriage, a prenuptial agreement will ensure the siblings’ interests in the family business are protected and do not form part of any future matrimonial property to be divided upon divorce.

The basic structure of prenups/postnups are simple, though the drafting is complicated and ideally both Husband and Wife should receive proper legal advice. Fortunately, they are an inexpensive insurance compared to the risks and costs they avoid. A solid business plan for a marriage can often translate into a happier marriage.

For further advice please contact one of the Family team at BPE on 01242 248287.


These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.


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