There is plenty of information that can be accessed about the benefits of entering into a Pre or Post Nuptial Agreement. However, what is not discussed as much, is the importance of reviewing and updating the Agreement itself.

Before looking at the importance of reviewing an Agreement, the benefits of entering into a Pre or Post Nuptial Agreement in the first place should be considered.

Following the Supreme Court decision in Radmacher v Granatino [2010] UKSC 42 in October 2010, the Court will uphold a pre (or post) nuptial agreement that is freely entered into by both parties with a full appreciation of its implications, unless in the circumstances it would not be fair to uphold the agreement. Provided that test is met, the Court will give effect to a pre-nuptial agreement.

Advantages of a pre-nuptial agreement

The advantages of entering into a nuptial agreement include:

  • Clarity. The parties to the agreement can make it clear to one another that certain property belongs to one party and will not be shared during the marriage or on any future divorce. Such property is often referred to by family lawyers as “non-matrimonial property”.
  • Certainty. The parties can agree at the outset of the marriage how the finances will be divided if they later separate or divorce.
  • Transparency. Both parties will know at the outset of the marriage the value of each other’s assets, which will assist in negotiations.
  • May save money. Whist the parties will incur legal fees for preparing and advising on the terms of the pre-nuptial agreement, it is usually much less expensive to negotiate and draft a pre-nuptial agreement than to litigate about the division of finances on separation.
  • Protection of assets. The parties can protect assets (“ringfence”) from one another, such as inherited assets, gifts received from a third party, or property acquired before the marriage. If the pre-nuptial agreement ringfences such property, the court is less likely to award a share of that property to the other party on any future divorce.
  • Debt protection. If one party has significant debts, either now or in the future, the pre-nuptial agreement can be used to protect the other party.
  • Protection of family members. A pre-nuptial agreement can protect the financial interests of children from a previous relationship by ensuring certain assets are ringfenced for them in the pre-nuptial agreement.
  • Minimises acrimony on divorce. Setting out how assets are to be divided on divorce in the pre-nuptial agreement should lead to fewer arguments about finances.
  • Improves communication. Discussing financial issues can be one of the most difficult aspects of marriage. Dealing with this at the outset of the marriage can strengthen a relationship and support good communication in the marriage.
  • Protection of business partners. The pre-nuptial agreement can protect that interest and prevent disruption to the business if the marriage breaks down in the future.
  • Provision on death. The pre-nuptial agreement can set out what should happen to any assets on the death of one / both parties to the agreement
  • Freedom to agree your own terms. A pre-nuptial agreement provides the freedom to agree terms without the court imposing a solution.

Why is it important to review a nuptial agreement?

When a Nuptial Agreement is drafted, it is done so on the basis of the existing facts. For example;

  • Financial circumstances of both parties, including income at the time of drafting.
  • The physical and mental health of both parties at the time of drafting.
  • The number of dependants for both parties at the time of drafting.
  • The physical and mental health of those dependants at the time of drafting.

Over the course of time, circumstances will change, and it is important to consider whether the terms of the Agreement would still stand the test of time and be considered fair and reasonable by the Court. The Agreement may no longer accurately reflect one or both parties’ original intentions. The Agreement may need updating to reflect change, for example a new business, inheritance, new property, a change in employment and health. It is important for those entering into the Nuptial Agreement to review the agreement with a family solicitor to consider whether the agreement would still be considered to meet the needs of both parties, and whether the agreement is still ‘fair’. There could also have been a change in the law which the parties would need advice on.

Most Nuptial Agreements contain a ‘review clause’ but a lot of couples overlook the importance of actually reviewing the agreement. There is a risk that in the event of a separation, the Agreement could be overturned if it has not been reviewed properly.

Whilst Nuptial Agreements will be drafted in order to attempt to consider change that can occur, the agreement cannot consider all eventualities and it is both good practice, sensible and recommended to review Nuptial Agreements with a family solicitor every five years, unless a significant event has occurred before the 5 year period has ended (e.g. birth of a child, serious long term illness etc), in which case the agreement should be reviewed at that point.

MaryCarmel Wilson offers advice to clients in the Tendring district and covers all areas of family law including divorce and financial matters arising from  separation, change of name deeds, children disputes involving parents and other family members as well as emergency applications including International Abduction, Domestic Abuse, Injunctions, cohabitation agreements, nuptial agreements.

MaryCarmel also provides advice to the Neurodiverse client in relation to family law matters and advises clients who require family law advice and who are also raising Neurodiverse children.