Pre-nups & Post-nups

A prenuptial agreement (or ‘pre-nup’) is an agreement made by a couple before they marry, setting out how their assets and liabilities will be divided in the event of a divorce.

Pre-nups are typically sought when one partner earns significantly more than the other or stands to come into a large amount of money, for example through inheritance. Pre-nups can however be useful for a range of other circumstances, for example if one or both partners has children from previous relationships, or if one partner has significant debt. Pre-nups are generally useful for couples of all incomes who want to avoid disputes in court.

A pre-nup serves to allocate assets, liabilities, and certain financial responsibilities in the event of a divorce. It therefore may include a detailed list of all assets and debts and what should happen to them if a couple divorces. It may also include arrangements for spousal maintenance payments. A pre-nup is limited to financial matters and cannot include child support or child custody matters. It also cannot include illegal or unfair matters.

While pre-nups are not automatically binding, they should be given decisive weight by the court as long as they meet certain criteria:

• The parties must have had independent legal advice;
• There must not have been any fraud, undue influence or misrepresentation;
• Both parties must have fully disclosed any relevant financial information; and
• The pre-nup is not profoundly unfair to one party

It is possible to update or change a pre-nup, as long as the revisions are made with the same formalities as the original pre-nup. This means that the parties must have had independent legal advice and there must not have been any fraud, undue influence or misrepresentation.

A post-nuptial agreement (or ‘post-nup’) is an agreement made after marriage which allocates assets, liabilities and financial other matters in the event of a divorce. A post-nup supersedes any previous prenup.

A couple may consider a post-nup where there has been a significant change in circumstances since marriage. For example, an unexpected inheritance or successful business venture which has altered a party’s financial status.

A post-nup will cover many of the same things as a prenup. This includes a detailed list of all assets and debts and what should happen to them if a couple divorces as well as arrangements for any spousal maintenance payments. A post-nup should also detail how any assets acquired after the post-nup should be handled. A post-nup is limited to financial matters and cannot include child support or child custody matters. It also cannot include illegal or unfair matters.

Post-nups are not necessarily harder to enforce than prenups. However an important factor in how decisive a prenup or post-nup will be is whether there has been any coercion or undue influence. It may be argued that coercion is less likely when the parties are still independent and make an agreement before they have entered into the marriage.