Post-nuptial agreements – why, when and how?

[2019] Fam Law 1431

December 2019

Family Law > 2019 > December > Articles

Family Law

Natalie O'Shea

Professional Support Lawyer Withers LLP

About the author

Why sign a post-nuptial agreement?

When to sign a post-nuptial agreement?

What can parties include in a post-nuptial agreement?

How enforceable is a post-nuptial agreement?

Edgar v Edgar [1980] 1 WLR 1410

Court of Appeal, Separation agreement

NA v MA [2006] EWHC 2900 (Fam), [2007] 1 FLR 1760

Baron J, Postnuptial agreement

Radmacher (Formerly Granatino) v Granatino [2010] UKSC 42, [2010] 2 FLR 1900

Prenuptial agreement

Kremen v Agrest (Financial Remedy: Non-Disclosure: Postnuptial Agreement) [2012] EWHC 45 (Fam), [2012] 2
FLR 414
Mostyn J, Separation/post-nuptial agreement

GS v L (Financial Remedies: Pre-Acquired Assets: Needs) [2011] EWHC 1759, [2013] 1 FLR 300
Eleanor King J (as she then was), Separation/post-nuptial agreement

B v S (Financial Remedy: Marital Property Regime) [2012] EWHC 265, [2012] 2 FLR 502
Mostyn J, Post-nuptial agreement

Hopkins v Hopkins [2015] EWHC 812 (Fam)

 Post-nuptial agreements – why, when and how?

Nicholas Cusworth QC, Post-nuptial agreement

Gray v Work [2015] EWHC 834

Holman J, Post-nuptial agreement

Versteegh v Versteegh [2018] EWCA Civ 1050, [2018] 2 FLR 1417

King LJ, Lewison LJ and Holroyde LJ, Pre-nuptial agreement

Brack v Brack [2018] EWCA Civ 2862, [2019] 2 FLR 234

Lewison, King, Peter Jackson LLJ, Prenuptial agreement

Natalie O'Shea is a professional support lawyer and qualified mediator in the Withers' London office. Natalie has
specialised in family law since 1995, in private practice and latterly as a PSL, working on divorce, matrimonial
finance, prenuptial agreements, cohabitation and private children issues, often with international elements. She is a
member of Resolution and formerly sat on the Resolution Mediation Committee.
'We are talking about protecting the future of the farm, Tony, the thing we have worked for all our lives . . .it concerns the
whole family. Being clear and upfront about where everybody stands makes perfect sense. I'm convinced that a postnup is
the best way forward for all of us'
Well said, Pat. The Archers radio drama, which has been broadcast in the UK since 1951 has become an active
platform for raising awareness about important family law issues. Its producers do not shy away from controversial
areas and one of the drama's more recent offerings raised the issue of problems which can arise in family-run
businesses when one couple within the business gets divorced. How will the financial claims from a soon-to-be ex-
spouse affect the future viability of the family business and the interests of the wider family members involved in it?
Pat's concern about her son Tom's marriage to the ambitious Natasha was well-placed and her suggestion that the
couple consider a post-nuptial agreement after their hasty marriage, refreshingly sensible.

Prenuptial and post-nuptial agreements (and pre- and post-civil partnership agreements) are neither the preserve of
the super-rich, nor have to be incredibly complex. Often, they are simply a sensible mechanism designed to reduce
potential uncertainty, acrimony and unnecessary legal costs by minimising the scope for dispute. Such agreements
can provide couples (and wider family members) with a measure of reassurance and certainty if properly entered
into. They can be used to identify any 'non-matrimonial property' which is to be protected from any claims on
divorce and are helpful in recording the intentions of a couple as to what they wish to happen in the unfortunate
event that their marriage breaks down. Those sometimes emotionally-charged and difficult-to-have conversations
are bravely and wisely undertaken, often resulting in clarity for the couple and peace of mind for wider family
members. As such they can inject a healthy dose of marital and financial realism into the marriage and the relations
between all those bound together in the family business. Pat was quite right to point out that being clear and upfront
about where everybody stands is the best way forward.

Entering into a post-nuptial or post-civil partnership agreement brings to a marriage or civil partnership all of the
benefits that a pre-nuptial agreement can bring, though there are several reasons why couples might opt for the
latter. The overriding benefit for those entering into any nuptial agreement in England and Wales is that by doing so,
they may achieve a measure of certainty about financial arrangements in the unfortunate event that the marriage or
partnership breaks down. The Supreme Court Justices in Radmacher (Formerly Granatino) v Granatino [2010]
UKSC 42, [2010] 2 FLR 1900, confirmed that the court can attribute appropriate (and in some cases decisive)
weight to an agreement as part of 'all the circumstances of the case'.

Lord Philips, (quoting the Board of the Privy Council in MacLeodd) put the, now familiar, principle thus:
[75] '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 their agreement'…
And as Lord Philips in Radmacher emphasised:
 Post-nuptial agreements – why, when and how?

[78] 'The reason why the court should give weight to a nuptial agreement is that there should be respect for individual
autonomy. The court should accord respect to the decision of a married couple as to the manner in which their financial
affairs should be regulated. It would be paternalistic and patronising to override their agreement simply on the basis that the
court knows best. This is particularly true where the parties' agreement addresses existing circumstances and not merely
the contingencies of an uncertain future.'
And it is at least arguable that by its very nature, a post-nuptial as opposed to a pre-nuptial agreement, can better
address those 'existing circumstances and not merely the contingencies of an uncertain future'.

There are various motivating factors:

A couple may have run out of time to sign their pre-nup before the wedding; a post-nup may form a part of
inheritance planning to benefit children from a previous relationship; the couple may wish to formalise their financial
arrangements and identify separate and marital property, so as to be organised and certain of their respective
intentions; alternatively, one party might want to protect an inheritance from claims on divorce; or there may be third
party interests which require consideration, such as a family business (as with Natasha and Tom). Sometimes post-
nuptial agreements are a device used by couples to renew their commitment to each other following relationship
difficulties. In other cases, a 'belts and braces' approach is adopted, whereby a couple plans to sign both a pre-
nuptial agreement before the wedding, and a post-nup after it.

Couples who have international connections, may be well-advised to enter into a post-nuptial agreement designed
to be valid in England and Wales if they have entered (by default or explicitly) into a matrimonial property regime or
signed a pre-nuptial agreement in another jurisdiction. Such clients are often surprised to learn that their
'separazione dei beni', or 'communaute reduite auz acuets' is not recognised in England and Wales where no
(formal at least) separate matrimonial property regimes exist. This issue is perhaps more pronounced when one
considers the consequences for globe-trotting couples connected with countries which have signed up to the
Matrimonial Property Regulation No 1103/2016 and Registered Partnership Property Regulation No 1104/2016.
Under these Regulations (which the UK has not signed up to) spouses and registered partners (of the 18 signatory
countries) jurisdiction to bring any claims in relation to matrimonial property regimes derives from divorce
proceedings, but spouses can sign an agreement in which they choose the law to be applied to their matrimonial
property, if it is the law of habitual residence or nationality of one of the spouses at the time of signing. What these
couples cannot do, is agree to give any future member state jurisdiction if they plan to live (and become habitually
resident) elsewhere. A further agreement will be needed, in default of which, the applicable law of the country of
habitual residence at the date of marriage would likely apply, which might not be the parties' intention. Given the
rise in the number of citizens with multiple nationalities and the growing global mobilisation of families there has
never been a greater need for couples to understand how they can seek to implement any agreements regarding
their matrimonial property when moving from jurisdiction to jurisdiction, especially when it comes to nuptial
agreements.

The most excellent and helpful resource Family Property and Succession in EU Member States: National Reports
on the Collected Data, 2019, recently published by Sveučilište u Rijeci, Pravni fakultet, University of Rijeka, Faculty
of Law, Hahlic 6, Rijeka, Croatia, and edited by Lucia Ruggeri, Ivana Kunda, Sandra Winkler illustrates the
differences of approach adopted across the EU 28 in relation to matrimonial property regimes and nuptial
agreements, in addition to providing a rich plethora of general comparative law information. This resource has been
created with the laudable aim of 'improving the quality of life of persons, who by choosing the lifestyles
characterised by the cross-border element, enforce the idea of the EU as a single area of diverse cultures and
traditions'. For example: in Belgium, a marriage contract may be concluded in order to choose a different property
regime or to modify the statutory one within some limits and pre- and post-nuptial agreements are allowed; in
Bulgaria, couples can choose statutory separate property regime and voluntary settlements; in Cyprus, pre-nuptial
and post-nuptial agreements are not valid, or at least not binding, but separation agreements are; in Denmark,
spouses can enter into pre-nuptial or post-nuptial agreements and can agree several property systems through
them, as an alternative to the legal community property regime; in Luxembourg, the equal division of property
regime applies automatically when the spouses choose not to sign a pre-nuptial agreement; and in the Netherlands,
 Post-nuptial agreements – why, when and how?

the community of property takes effect by operation of law if the future spouses marry without a prior nuptial
agreement.

The courts in England and Wales, of course, operate within a discretionary system underpinned by statute, the
Matrimonial Causes Act 1973. So whilst couples can benefit from the overarching protection afforded by the
discretionary system, those whose financial matters fall to be determined in England and Wales (either through
financial remedy proceedings linked to divorce or dissolution or via an application under the Matrimonial Property
and Family Proceedings Act 1984) can also agree to negotiate the terms of a valid post-nuptial or pre-nuptial
agreement in the knowledge that the court may attribute appropriate and perhaps decisive weight to it in the event
of relationship breakdown.

As with pre-nuptial agreements, a bespoke agreement is created to suit a couples' circumstances and will typically
record the financial arrangements which are to prevail should the relationship fail. Terms will cover, for example:
how property brought into the marriage or civil partnership is to be treated; what arrangements are to apply to the
family home/s; whether the couple wish to keep their property separate or for it to be comingled and/or become joint
property; how future inheritance is to be treated; how future earnings/bonuses are to be ring-fenced or shared; and
what provision is to be made in relation to property, income, pensions and liabilities. Less explicit is that by their
nature, post-nuptial agreements record facts which can potentially imbue the agreement with evidence of intentions
which strengthen the 'fairness' of the terms and the circumstances in which the agreement was made, perhaps in a
way that pre-nuptial agreements cannot. Postnuptial agreements will include reference to the marriage itself having
already taken place and perhaps children having been born. They will not be conditional upon the marriage and
may include a statement of purpose (namely to promote and encourage the marriage or civil partnership, rather
than to facilitate its breakdown) and a statement of intent (for example, the hope that the marriage will continue for
the rest of the couples' lives). In the event that such hopes are not fulfilled, it will record the couples' intention to
resolve any financial claims on the basis of what they consider, having already married each other and perhaps had
children, to be fair.

As with all nuptial agreements, the conditions set down by the Supreme Court in Radmacher and cases since, must
be met for a pre-nuptial agreement to have any chance of carrying weight on subsequent relationship breakdown.
As neatly summarised by Holman J in Luckwell v Limata [2014] EWHC 502, [2014] 2 FLR 168:
•     It is the court, and not the parties, that decides the ultimate question of what provision is to be made.
•     The over-arching criterion remains the search for 'fairness', in accordance with section 25 as explained by
the House of Lords in Miller/McFarlane (ie needs, sharing and compensation). But an agreement is
capable of altering what is fair, including in relation to 'need'.
•     An agreement (assuming it is not 'impugned' for procedural unfairness, such as duress) should be given
weight in that process, although that weight may be anything from slight to decisive in an appropriate case.
•     The weight to be given to an agreement may be enhanced or reduced by a variety of factors;
•     Effect should be given to an agreement that is entered into freely with full appreciation of the implications
unless in the circumstances prevailing it would not be fair to hold the parties to that agreement.
•     Whether it will 'not be fair to hold the parties to the agreement' will necessarily depend on the facts.

Again, when it comes to how enforceable, or binding they are, there is a nuanced distinction between post-nuptial
and pre-nuptial agreements. Each come with an emotional health-warning, but as highlighted above, the fact that
post-nuptial agreements are made, not in contemplation of and conditional upon the marriage, but after the wedding
or civil partnership and often well on into the union, can be an advantage. No agreement can be immune from
allegations of undue influence, as the pre-Radmacher decision of NA v MA [2006] EWHC 2900 (Fam), [2007] 1 FLR
1760 (see below) demonstrates and of course, any couple entering into a nuptial agreement since Radmacher will
be deemed to have intended to be bound by its terms, but query whether nuptial agreements signed post-marriage
are less likely to be considered unfair, especially if they are recently entered into.
 Post-nuptial agreements – why, when and how?

As per Lord Phillips in Radmacher:

'The circumstances of the parties at the time of the agreement will be relevant. Those will include such matters as their age
and maturity, whether either or both had been married or been in long-term relationships before. For such couples their
experience of previous relationships may explain the terms of the agreement, and may also show what they foresaw when
they entered into the agreement. What may not be easily foreseeable for less mature couples may well be in contemplation
of more mature couples' [72]
The circumstances under which post-nuptial agreements are signed may mean that they more easily fall in within
the category of agreements which are afforded appropriate, if not decisive weight.

As we know, especially in the current political climate, the law does not stand still and this is one of the fastest
developing areas within the family law arena, but set out below are some of the key cases which may be relevant to
spouses contemplating entering into post-nuptial agreements in England and Wales.

Brief facts

CA set out a non-exhaustive list of matters which the court should consider when deciding what weight should be
placed on an agreement.

Terms of agreement

Separation agreement negotiated with solicitors, from which W wished to renege.

Nuptial agreement principles

•     Contractual concepts such as misrepresentation or estoppel are not relevant;

•     Was there pressure by one side, whether one side exploited a dominant position to secure an advantage,
whether either party's knowledge of the situation was inadequate?
•     Has either party received bad legal advice?
•     Have circumstances changed and whether such changes were overlooked or unforeseen at the time of
formation?

Formal agreements, properly and fairly arrived at with competent legal advice, should not be displaced unless there
are good and substantial grounds for concluding that an injustice will be done by holding the parties to the terms of
their agreement.

Just because a party may have done better by not signing the agreement, is not a ground for a party to resile from
it.

Brief facts

Pre-Radmacher case. H insisted W sign postnuptial agreement as condition of reconciliation.

Terms of agreement

Terms drafted on basis of what H considered to be fair and generous without any consideration of what might be
appropriate or what W's needs or sharing claims were. Terms of agreement were not premised on fairness.
 Post-nuptial agreements – why, when and how?

Nuptial agreement principles

Agreements cannot oust the jurisdiction of the court under MCA 1973. Agreements not enforceable per se but could
be persuasive or definitive depending on the circumstances that led to them being entered into. In this case, the
post-nuptial agreement was not enforced because H was found to have exerted undue influence on W to sign such
that it adversely affected her ability to make rational decisions.

This post-nup was offered on a take it or leave it basis when W was in an emotional meltdown. No time for careful
reflection. Would be wholly unfair to implement its terms or to use them as a starting point with which to judge the
fairness of any award.

Brief facts

W (German) H (French) married for eight years with two children. Signed agreement in Germany. W financially
stronger (due to inherited wealth).

Terms of agreement

Choice of law clause provided that the effects of the marriage, including the laws of matrimonial property and
succession, were to be subject to German law. Neither party was to derive any interest in or benefit from the
property of the other during the marriage or on its termination.

Agreement made no provision for what was to happen in the event of the couple having children.

Nuptial agreement principles

Pre-nuptial agreements are not against public policy. The same principles apply to pre-nuptial and post-nuptial
agreements.

The court should attribute appropriate (and in this case decisive) weight to an agreement as part of 'all the
circumstances of the case'.

If it is clear that a party is fully aware of the implications of a pre-nuptial agreement and indifferent to detailed
particulars of the other party's assets there is no need to accord the agreement reduced weight because he or she
is unaware of those particulars. What is important is that each party should have all the information that is material
to his or her decision, and that each party should intend that the agreement should govern the financial
consequences of the marriage coming to an end (para [69]).

The fact that the agreement was binding under German law was relevant to the question of whether the parties
intended the agreement to be effective, at a time when it would not have been recognised in the English courts.
Following this judgment, it will be natural to infer that parties entering into agreements governed by English law will
intend that effect be given to them (para 74]).

There were no factors which rendered it unfair to hold H to the agreement. He was extremely able and his own
needs would mainly be indirectly met from the provision for the needs of his two daughters until the younger
reached the age of 22 (para [120]). Fairness did not entitle him to a portion of his wife's wealth, received from her
family independently of the marriage, when he had agreed he should not be so entitled when he married her (para
[122]).
 Post-nuptial agreements – why, when and how?

Brief facts

W's application under Part III of 1984 Act. Parties had signed a separation agreement / postnuptial agreement that
had been approved by the Israeli court.

Terms of agreement

The agreement provided, inter alia:

'Contemporaneous to the performance of the conditions of this contract, the spouses affirm that they will not bring
against one another any claims or legal actions of any kind resulting from and/or relating to their marriage and in
contravention of the terms of this contract.'

Nuptial agreement principles

An agreement which gave W only about $1.5m out of a huge fortune accumulated during the marriage was likely to
be unfair, whether viewed from a needs or sharing perspective.

W had not entered post-nuptial agreement with full appreciation of its implications. Holding W to its terms would be
grossly unfair – it did not meet her reasonable needs and it prejudiced the needs of the children. Agreement
accorded no weight.

Only in an unusual case, absent independent legal advice and full disclosure, will a party be taken to have freely
entered into a marital agreement with a full appreciation of its implications.

Brief facts

H and W had been married for 10 years and had two children. They were both English, moved to Spain, registered
their marriage there, and signed two post-nuptial agreements.

Terms of agreement

The first agreement stated that 16.88% of the matrimonial home was held by W with the remainder being held in
equal shares. The second declared that all future assets would be owned equally under the Spanish matrimonial
property regime.

Nuptial agreement principles

Neither party understood the terms of the agreement; even the Spanish expert was confused. H was not
concentrating on the agreement at the time, and W was concerned that she should be financially secure as was
worried that she had damaged her career. They both thought the agreements were in their favour. The only
intention which the court could infer, was that they both agreed an equal division of all assets subsequent to signing
the Spanish documents.

Brief facts
 Post-nuptial agreements – why, when and how?

H and W married for 14 years, both contributed to H's business, worth £6m.

Terms of agreement

There was a tacit agreement to adopt a matrimonial regime of separate property on their marriage in Catalonia.
Tacit because it was the default, but bolstered by an express separation of property agreement which was intended
to deal with a specific property being bought in W's name at that time which would otherwise have been governed
by the default community of property regime.

Nuptial agreement principles

There is a marked difference between a negotiated pre-nuptial agreement, which specifically contemplates divorce
and which seeks to restrict or influence the exercise of discretion to which the law gives access, and an agreement
made in a civil jurisdiction which adopts a particular marital property regime.

The parties should intend the agreement to have effect wherever they might be divorced and most particularly were
they to be divorced in a jurisdiction that operated a system of discretionary equitable distribution (this point has
been distinguished and clarified by the Court of Appeal in Versteegh v Versteegh – see below).

The parties had not entered into it with a full appreciation of its implications and so no weight was attached to it.

Brief facts

Three-year marriage and 'post-nuptial' agreement signed after separation which purported to limit and define
appropriate provision between the parties in the event of marital breakdown.

Terms of agreement

Agreement provided that W would receive family home (c£500k), and other assets worth c £500k in full and final
settlement. On marriage breakdown W sought further share of H's alleged £54m.

Nuptial agreement principles

The judgment of the Supreme Court in Radmacher remains the principal touchstone for all cases which involve the
impact of a nuptial agreement upon the financial remedy process.

The postnuptial agreement was not obtained by duress and was upheld. Needs did not trump the agreement. The
agreement was freely entered into on both sides with full advice. W understood at the time that it was water-tight.
She had chosen to ignore the advice from her specialist matrimonial lawyers.

Whilst the agreement could significantly alter what was considered fair, the court had also to decide whether the
agreement left W in real need, in a situation where H had more than a sufficiency. 'Real need' was not to be
equated to 'reasonable need'.

On balance, the court held that W's needs were met by H's offer to settle on the provisions set out in the agreement
and a lump sum with each party paying their own costs.
 Post-nuptial agreements – why, when and how?

Brief facts

H and W were both Texan and entered a nuptial agreement during the marriage when they decided to expatriate
after a decision to move to Japan. There was a nuptial agreement and then an addendum, which dealt with claims
on divorce.

Terms of agreement

Agreement stated that if W sought provision on divorce from a court in another jurisdiction, she relinquished any
rights under the agreement. H argued that meant W was entitled to nothing.

Nuptial agreement principles

H's interpretation of the agreement was rejected – the agreement did not mean that W was not entitled to anything,
and even if it did, it would be unfair. There was no basis for payment by instalments without interest. There was
sufficient liquidity for immediate payment.

H awarded to W an equal division of the available net wealth.

Brief facts

H and W were both Swedish. The wedding took place in Sweden where the parties had signed a pre-nuptial
agreement.

Terms of agreement

The pre-nuptial agreement committed the parties to a separation of property regime.

Nuptial agreement principles

The first significant consideration of pre-nuptial agreements by the Court of Appeal since Radmacher.

The desirability of legal advice forms part of the miscellany of factors which a judge considers before concluding
that a party did (or did not) have a full appreciation of the implications of a pre-nuptial agreement.

There is no requirement for parties entering into a foreign pre-nuptial agreement to receive legal advice on
discretionary jurisdiction in order for them to have a full appreciation of the effect it would have in England (contrary
to B v S); King LJ said it cannot be right that a couple have to take legal advice of the type envisaged by Mostyn J
'just in case' in ten years' time they move to live in the UK or, that they have in some way to 'refresh' their PMA by
the wife receiving legal advice prior to relocating.

Lord Philips in Radmacher identified three heads for consideration:

a)     factors detracting from the weight to be accorded to the agreement;
b)     factors enhancing the weight to be accorded to the agreement: the foreign element;
c)     fairness.
 Post-nuptial agreements – why, when and how?

Brief facts

Swedish nationals signed pre-nuptial agreements and moved to the UK where they divorced. W sought 50%
matrimonial assets.

Terms of agreement

Both agreements contained a prorogation clause, the purported effect of which was to give exclusive jurisdiction for
property distribution on their separation to the Swedish courts and a separate property clause.

Nuptial agreement principles

The second significant consideration of pre-nuptial agreements by the Court of Appeal. It concluded there was no
election under the EU Maintenance Regulation and so nothing to stop the English court considering the wife's
needs although it was possible that the agreement would operate to contract out of 'sharing'.

A clause that is ambiguous or unclear cannot constitute a maintenance prorogation clause for the purposes of Art 4
of the Maintenance Regulation.

Where there is a valid nuptial agreement, the terms of which amount to one party having contracted out of a division
of the assets based on sharing, the court would be likely to regard fairness as demanding that the party received a
settlement that was limited to that which provide for his/her needs; although that would not be the outcome in every
case, since even where there is a valid pre-nuptial agreement, the court has to take into account all of the factors in
s 25(2) of the MCA 1973 and a proper consideration of all the circumstances which might lead the court, in its
search for a fair outcome, to make an order which, contrary to the terms of the nuptial agreement, provides in
excess of needs.

Even where the court considers a needs-based approach to be fair, it still retains a degree of latitude when
assessing those needs,

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