The post nuptial agreement in divorce law

8th March 2015 by

 

The majority of British adults are likely to be aware of the basic function of pre nuptial agreements in family law. Their popularity among the famous and wealthy, and media reportage of their use in high-profile divorce cases, have left most people with an understanding of the basic principles of a pre-nup –: to set out a schedule for division of wealth, prior to a marriage or civil partnership, should the relationship break down.

However, fewer will realise that should a couple feel the need to agree terms for a financial settlement after they have legally committed to each other, either by marriage or civil partnership, that they are able to do so through the drawing up of a post nuptial agreement, and furthermore, that post-nups are deemed legally binding in the UK (subject to consideration).

MacLeod v MacLeod and post nuptial agreements
A Privy Council judgement made in 2008 ruled that financial agreements made during a marriage or civil partnership, which seeks to determine the provision of wealth upon separation, divorce or dissolution, are enforceable by the courts under sections 34 to 36 of the Matrimonial Causes Act (1973).

Amongst other the things, the court distinguished that a post nuptial agreement differs fundamentally from the pre-nuptial form as it could not be argued that the signing of the agreement was brought about, whether by coercion or otherwise, in order to secure the union.

The MacLeod v MacLeod case focused on and American couple who married in Florida in 1994, signing a pre-nuptial agreement on the day of the wedding. They moved to the Isle of Man the following year and by 2002 the couple had five children. In July of that year, they negotiated a post nuptial agreement which would have provided more for the wife than stipulated in the pre nup, but possibly less than if the divorce settlement had been decided at ancillary relief proceedings.

When the marriage finally broke down in 2003, property disputes and disagreement over the size of a lump sum payment precipitated contested proceedings. The wife argued that the post nuptial agreement should be ignored.

Initially the deputy Deemster (a judge in the Isle of Man) ruled that the 2002 agreement should be upheld, but called for revisions pertaining to the amounts of both the lump sum and the housing fund – both parties appealed, both appeals were dismissed.

Eventually, a final appeal was made by the husband to the Judicial Committee of the Privy Council in the UK regarding details surrounding the lump sum payment. The appeal was upheld.

The case gave rise to notable points regarding pre- and post-nuptial agreements.

Thus, an agreement made after the marriage or civil partnership may be taken into account in ancillary relief proceedings, and may be given more weight than a pre-marital agreement. However, the court will:

  • consider whether normal contractual procedure was maintained, specifically the absence of fraud and undue influence; and
  • under s35 of the Matrimonial Causes Act, have power to vary the agreement to take account of any change of family circumstances.

If a post nuptial agreement provides differently to how a court may have ruled this should not be enough to make the agreement dismissible.

Post nuptial agreements with Healys’ divorce solicitors in London and Brighton
The negotiation of a financial agreement after a marriage or civil partnership requires careful thought and expert legal advice.

Healys’ divorce solicitors in London and Brighton are highly experienced in all aspects of family law and, as we are part of a full service legal firm, we have the benefit of being able to utilise the wide-ranging knowledge and legal skills of our colleagues in other departments who can offer help and advice on the manifold and complex issues arising out of family breakdown.

For more information on the service we provide, please contact Catherine Taylor on 01273 669 124 or email catherine.taylor@healys.com for Brighton. For London please contact Jane Sanders on 020 7822 4107 or email jane.sanders@healys.com