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Pre and Post Nuptial Agreements for High Net Worth Individuals Explained - YouTube
Channel: Stephens Scown
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Prenuptial agreements or prenups are on
the increase as are postnups.
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Once thought to be the preserve of
celebrities more and more people,
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particularly where significant wealth is
involved, are entering into them. Family
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Law Partner Andrew Barton is here to
tell us more. First of all what exactly
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are prenups and postnups? A prenuptial
agreement is an agreement entered into
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by a couple ahead of their wedding day
dealing with how their finances will be
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dealt with during the marriage, but also
how they would be dealt with in the
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unlikely event that they ever divorce. A
postnuptial agreement is broadly the
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same but entered into by the couple
after they marry. And are they legally binding?
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They carry extreme persuasive weight in
the English Courts now provided that
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they include full financial disclosure
by each party, provided that they have each
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taken independent legal advice in the
agreement and there has been no undue
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influence applied, then they will carry
a lot of weight. Also with prenuptial
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agreements they need to be entered into
at least 28 days before the wedding date.
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There's an overarching principle that
the agreement needs to be fair and so if
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the agreement isn't fair then there's no
question that the courts would hold the
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parties to it. And are there any issues
people should be aware of? The main thing
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that we found with prenuptial and
postnuptial agreements is that you
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can't provide for everything,
you can't predict what will happen in
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the couple's marriage and so with the
passage of time there's a greater
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likelihood that something unforeseen
might occur. There's two ways of dealing
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with this. Firstly in the agreement we
include a review provision so that in
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the event that certain circumstances do
happen
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there's provision for the couple to
revisit the agreement, to revisit its
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terms and whether it's still going to be
regarded as fair. A second way of dealing
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with it though is to include some self
adjusting clauses so that if there is a
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reduction in the wealth then there'd be
a reduction also in the provision that's
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provided so that so they can still rely
on the agreement and it still carries in
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a lot of weight. And who should enter
into a prenup or postnup? If there's
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significant wealth involved we find that
prenuptial and postnuptial agreements
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ought to be a consideration.
If there's a big disparity between what
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the couple are bringing to the marriage
they're a very good idea also if a
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couple have, or if one of the parties has,
been married before and maybe they wish
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they'd entered into a prenup or a
postnup having been through a divorce.
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Sometimes they might have children
from their first relationship who they
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don't want to disentitle if they go
their separate ways; if a couple
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reconcile for example and the reason for
their initial separation was financial
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mistrust or financial issues we find
that postnuptial agreements can be a
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very good idea then. Is it just a case of
ring-fencing the assets the couple bring
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to the marriage? That can sometimes be
appropriate but more often not if you
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were to conduct that ring-fencing and it
were to be a long marriage that simple
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ring-fencing wouldn't provide for a
reasonable outcome. So you have to
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approach these agreements with a broader
outlook; good family lawyers would
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look at them and then ensure that
whatever time they come to be relied on
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they still provide reasonable provision.
Above all else you've got to conduct
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these agreements and provide the advice
necessary in a way that doesn't
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compromise the relationship, you've
got to be sensitive to the fact that the
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couple want to carry on in their lives
together and very often they're about to
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embark on what will hopefully be a very
long and happy marriage and so you have
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to approach these agreements in a
sensitive and non confrontational way. So
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it's likely that seeking legal advice
about prenups and postnups is going to
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become more common particularly for
people where significant wealth is
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involved or perhaps embarking upon a
second marriage.
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