A post-nuptial agreement is a legal document entered into by spouses after marriage. It sets out how the couple’s assets and financial matters will be handled during the marriage and in the event of separation or divorce. These agreements can provide a clear roadmap for the division of property and finances, offering reassurance and financial transparency within a marriage. Despite not being automatically legally binding, post-nuptial agreements have gained significant legal weight following key case law and developments in family law.

Scope and Content of Post-Nuptial Agreements

A typical post-nuptial agreement identifies and lists both matrimonial property and non-matrimonial property:

• Matrimonial (Joint) Property: Includes assets acquired during the marriage or held in joint names, such as the family home and joint bank accounts.
• Non-Matrimonial (Separate) Property: Typically includes:
  • Assets acquired before the marriage
  • Inherited wealth
  • Gifts received individually by the spouses during the marriage

Post-nuptial agreements can also cover:

• Income and future earnings
• Interests in trusts
• Financial provision for existing children (though not for future children, due to unpredictability)

Post – nuptial agreements often include a review clause, setting out when and how the agreement should be updated—especially in light of future major life changes, such as the birth of a child or a future inheritance.

It is important to note that these agreements generally do not cover non-financial arrangements for children, such as custody or visitation, as these matters are always subject to the court’s discretion based on the child’s best interests.

Purpose and Benefits

The main objectives of post-nuptial agreements include:

• Clarification: Establishing financial transparency and security between spouses, particularly for the financially weaker party.
• Certainty: Defining how property and assets will be divided in case of separation or divorce.
• Protection: Safeguarding inherited or pre-marital assets from potential claims from the other spouse.
• Minimising Conflict: Reducing the scope for expensive and emotionally taxing litigation in the event of marital breakdown.

Legal Status and the Role of the Courts

Under English law, post-nuptial agreements are not automatically binding. Courts retain broad discretion under section 25 of the Matrimonial Causes Act 1973 (MCA 1973) when resolving financial claims upon divorce. However, courts do take nuptial agreements into account as a “relevant circumstance” and may give them significant—sometimes decisive—weight.

The landmark case of Radmacher v Granatino [2010] UKSC 42 set out that:

“The court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to the agreement.”

The Three-Stage Test for Fairness

The fairness of a nuptial agreement is evaluated using the Radmacher – Granatino test:

1. Freely Entered Into: Both parties must have entered into the agreement without undue influence, coercion, or misrepresentation.
2. Full Appreciation of Its Implications: While detailed financial disclosure is helpful, what matters most is that each party understands the consequences of the agreement. Independent legal advice is strongly encouraged.
3. Fairness at the Time of Enforcement: The court assesses fairness with reference to the prevailing circumstances, ensuring the agreement does not prejudice children or leave one party in financial need.

In assessing fairness, courts consider the “need, compensation, and sharing” principles:

• Need: Ensuring adequate housing and income.
• Compensation: For career sacrifices made during the marriage.
• Sharing: Equal division of marital assets; however non-matrimonial property can be clearly identified and ring-fenced.

Key Considerations for Drafting

Receiving independent legal advice is strongly recommended for both parties, as it significantly increases the likelihood that the agreement will be considered enforceable in the event of a marriage breakdown.

Full and Frank Financial Disclosure is also very important as it reduces future disputes and ensures that both parties have all the elements to make an informed decision.

Review Clauses are also particularly important as they ensure that the agreement can be updated as soon as the need arises or in anticipation of major life changes.

Conclusion

Although not automatically binding, post-nuptial agreements are a powerful tool in managing marital finances and protecting individual assets.

When drafted properly—with transparency, fairness, and with proper legal advice—they are likely to be upheld by courts in case of separation or divorce. As such, they provide both clarity and security, enabling couples to approach the financial aspects of their marriage with confidence and mutual understanding.