Can you protect your financial interests after marriage? Find out more about postnuptial agreements and other QNA's that can reduce exposure before and after you get married.
The quick answer is yes; prenuptial agreements have strict time constraints that apply and dictate that the agreement must be finalised 28 days prior to the marriage to give maximum chance of recognition and application. Additionally, there are a number of other measures that demand full financial disclosure, both parties seeking independent legal advice and of course that the agreement was entered into fairly, freely and without duress. Whilst all of these criteria are easily met if properly prepared, the eventual enforceability of the agreement will often hinge on correct composition.
If however the deadline has passed to enter into a prenuptial agreement, this does not mean it’s too late to protect interests in the event of a marriage breakdown. In fact, less well known forms of agreement can have a similar effect as a prenuptial agreement and in some cases may even be more appropriate, whilst still being available at later stages of the relationship.
What is a Postnuptial Agreement?
A postnuptial agreement may be a less familiar term. Socially they are discussed less than their counterpart and yet legally, they can be just as enforceable and in some cases more so. Postnuptial is a form of Qualifying Nuptial Agreement (QNA) and still adheres to many of the criteria present in prenuptial agreements, for example, financial disclosure and the agreement being fairly entered into. Of course as the name suggests, these agreements can be entered into subsequent to the marriage and perhaps even close to the divorce.
The court has in some cases seen the use of a postnuptial agreement as a more current and therefore relevant agreement than a prenuptial agreement. For these reasons the court is often more willing to sacrifice its discretion in favour of the autonomy of both parties. However, this is not to say that the court will completely forfeit its right to variation in the presence of an agreement if it is considered unfair. It is therefore imperative that the correct guidelines are adhered to before relying on the court to enforce an agreement that may eventually render an unwanted decision.
The Rise of Postnuptial Agreements
Neither form of agreement is considered to be more effective or better than the other; they simply offer different approaches to suit different situations. This is however unsurprising as the development of QNA’s has been largely fuelled by the changing dynamic of relationships within society. Postnuptial agreements have become more popular in the past decade mainly because of this phenomenon.
Adding more weight to their legitimacy was the decision given in the Privy Council in the case of MacLeod v MacLeod 2008, in which the enforceability of a postnuptial agreement was clarified. The overriding feeling of the court was that these agreements should be enforceable. In fact, in the obiter dicta of her judgment Lady Hale, it was made clear that she believed that these agreements could be binding if Parliament was willing and legislated for it. She supplemented this point with the notion that it would be outside of the courts scope to make such a radical change in the law. This however, coupled with the subsequent recommendation for the Law Commission to simplify the law in this area through the use of legislation on QNA’s, makes it easy to see how Family law is developing in this area.
Therefore, the reality is that it is never too late, or early for that matter, to consider an agreement with your partner or spouse. Expert legal advice can help both parties draft a fair and reliable agreement that offers peace of mind and transparency for the future.
If you’re wondering whether a prenuptial or postnuptial agreement is right for you, download our Prenuptial Agreements – A Guide for Clients. We’ll help you to discover your options on QNA’s and demonstrate how they can protect your assets should you decide to end your marriage.
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