Prenups and postnups - do you need one?

The financial and emotional factors

7 minutes

Do prenuptial and postnuptial agreements make good financial sense? What about the emotional side? How do you broach the subject with your partner?

We talk to two legal experts about what you need to consider.

  • Nuptial agreements can protect assets such as property or inheritance
  • For better, for worse: are they worth the emotional strings?
  • Prenuptial agreements are becoming more popular

Could a prenup or postnup give you extra financial security?

What are prenuptial and postnuptial agreements?

Prenups are arranged before a marriage, while postnups can be done afterwards. They both outline what would happen to the married couples’ finances if a marriage was to end. They are often used to protect property, inheritance and even life insurance policies.

Traditionally they’ve been viewed as an unromantic way to look at marriage. However, with 42% of UK marriages ending in divorce [1], they can be a practical layer of protection and a way to lower the cost and confusion of divorce.

Although not legally binding, they may stand up in court, if the right conditions have been met. Especially since the landmark case of Rachmacher and Granatino in 2010, when a prenup was adhered to during a divorce settlement.

Nuptial agreements need to meet certain criteria to be valid

If you’re thinking about a nuptial agreement, there are a number of factors to consider.

This includes what might happen to existing assets, such as homes or businesses owned by one partner. You also need to look at future wealth gain, such as inheritance money, both for the partner in question and any existing children.

Including details about children ‘goes to the heart of the transparency of the agreement, as it makes sure that both parties are entering into the agreement knowing exactly what their respective obligations and financial commitments are,’ explains Thomas Browrigg, partner at the law firm Goodman Ray.

However, in order for the agreement to be valid there are certain conditions that must be met.

‘For example, if the agreement is signed too closely to the date of the marriage (either before or after), unfair pressure is exerted by one party over the other, or a party does not take legal advice – although this will not automatically make the agreement void – it could all arise in the agreement being rejected in court,’ explains Claire Filer, partner at the law firm BP Collins Solicitors.

When making an agreement, she says, ‘it should be signed with the benefit of full and frank disclosure of each other’s capital and income resources and therefore that information should be put together at an early stage.’

A life insurance policy can be added to an agreement

Life insurance policies are designed to protect your loved ones, but if you have a joint life insurance policy or a joint annuity this can cause confusion in the case of divorce.

With nuptial agreements, it is possible to include life insurance policies and to state what will happen with the death benefits of a policy.

These agreements only become relevant when a marriage breaks down. At that point, it requires ‘a court to approve a financial settlement that was entered into in good faith before the marriage broke down,’ explains Thomas.

It’s possible to protect an existing policy and ‘if you have a life insurance scheme with a surrender value, this can be divided up with other capital assets, while you can also include provisions upon divorce for one or both parties to maintain a life insurance policy post-divorce,’ he adds.

Does a pre or postnuptial make emotional sense to you?

If you’ve decided the agreement is the right decision for you, you also need to consider the emotional side of things. When you get married, you’re doing so with the promise of staying together forever.

‘It can be difficult for people to get past the emotional barrier of discussing what should happen if a marriage breaks down when you’re in a happy relationship,’ says Claire.

However, while they may seem unromantic, ‘these agreements can actually be a buttress to a relationship, and after an initial difficult conversation, couples can find the discussion helpful since it is reassuring to be able to talk openly about potentially difficult and challenging topics,’ she adds.

According to law firm statistics, just under a quarter of people who enquire about prenuptial agreements (a phenomenon that has risen by up to 70%) then go on to cancel the wedding. However, lawyers were keen to argue that couples who broke up after enquiring about a prenup would have done so anyway, and it’s better that this happened prior to the wedding.

Marriage today is very different to what it used to be and, with more ending in divorce, it’s easy to see why more people are asking about prenuptial and postnuptial agreements. They’re a good way to protect your finances and to make sure your children aren’t missing out on future inheritance money or protection from existing life insurance policies. However, they are not to be entered into lightly and it’s important you and your partner consider all the financial and emotional considerations before doing so. 


[1] Nicola Haines, 2018. Divorces in England and Wales: 2018, Office for National Statistics