Prenuptial and Postnuptial Agreements

A prenuptial agreement, often called a ”prenup” is a legal contract that couples enter into before marriage. It outlines how assets and debts will be divided if the marriage ends in divorce or death. This includes all aspects of your finances, i.e. property, savings, investments, businesses, and even future inheritances.

While often associated with protecting wealth, prenups offer benefits to couples of all financial backgrounds. They can, for instance:

• Protect premarital assets, inheritances and interests.
• Clarify financial responsibilities during the marriage, such as bill payments and savings goals.
• Minimise potential disputes and streamline the divorce process if the marriage ends.
• Offer reassurance and security about the future.

A postnuptial agreement, or “postnup”, is created after the couple is already married. It serves the same purpose of outlining financial arrangements. A postnup can be particularly useful after significant life changes, such as the birth of a child, a career change, or the acquisition of substantial assets.

Postnuptial agreements can help:

• Keep financial agreements updated to reflect new realities in the marriage.
• Safeguard assets acquired during the marriage.
• Provide a structured way to address disagreements about money.
• Encourage communication about finances.

Prenuptial and postnuptial agreements can cover a wide range of financial matters, including:

• How property (both premarital and acquired during the marriage) will be divided.
• Whether one spouse will need to provide financial support to the other following a divorce.
• How inheritance will be handled.
• How business interests will be divided or protected.
• Any other financial concerns that are relevant to the couple.

While not automatically legally binding, prenuptial and postnuptial agreements are increasingly recognised by the courts, especially if they meet certain criteria:

• The terms of the agreement should be equitable and not overly favour one party.
• Both parties are required to fully disclose all of their financial assets and liabilities.
• Each party should seek independent legal counsel to ensure they understand the agreement’s implications.