Should you be concerned if your partner suggests a postnuptial agreement? You should probably applaud their good sense. If you don’t already have one, you may well want one.
Suggesting a postnup to your partner is not exactly the stuff that romantic dreams are made of, but it can prevent the less desirable fireworks in a relationship. And however long you’ve been together, it’s never too late to consider one.
A postnuptial agreement is similar to a prenuptial agreement, but made after a wedding or civil partnership has taken place. Like a prenup, it sets out what should happen to your assets if you separate or divorce.
Conventional wisdom is that people only ask for a postnup if they’re suspicious of their partner or planning to head out the door. In reality, by introducing transparency around your financial arrangements, it can bring greater trust to a relationship.
And if you do eventually split up, it could save on legal wrangling’s and fees, and protect an inheritance or family business.
So why should you consider a postnup?
The general principle when couples split up in Scotland is that assets which one partner owned before the marriage, or received as a gift or inheritance afterwards, are not included in the matrimonial pot, which is divided if you split.
But life is fluid and the lines around the pot can blur. A couple of examples should illustrate this:
- A wife inherits family money after her marriage. As it’s an inheritance, it’s not included in the matrimonial assets. But what if she then uses it as a deposit for a property the couple live in, or to set up a business they both run? Then it may be part of the matrimonial pot, after all.
- One partner builds up a thriving business whilst still single. Shortly after marriage, he changes the structure of the business – for example, incorporates it. Even if he built the business premarriage, it may now be a matrimonial asset and part of any financial settlement on divorce.
There are countless other examples where the limits of the matrimonial pot may be unclear. This will often make the financial arrangements on divorce more contentious and costly – especially if a family business is involved.
And when is a good time to do a postnup?
Firstly, if you intended to make a prenup, for example, to ring fence assets for children from a previous relationship and didn’t get round to it.
Secondly, if your financial situation changes in some way – perhaps because of a windfall, business restructuring or career changes.
The agreement will be legally enforceable in Scotland, as long as it’s fair, reasonable and has been properly drawn up.
