As a parent, after your child is married it may seem like a good time to give them a financial contribution to help them onto the housing ladder or start a business. However, if their relationship later ends in divorce all their assets, including your generous gift, could be subject to division by the court if they do not have a postnuptial agreement in place.

A postnuptial agreement is a written contract that married couples or civil partners can enter into, which will determine how their assets, property and pensions will be divided if the marriage or civil partnership does not work out. It can also specify whether maintenance will be paid by one person to the other.

Whether you are helping to fund a deposit on a house, putting capital into a business venture, passing on family heirlooms, land or just handing out an early inheritance, you will want to see that your hard-earned cash is protected. Encouraging your child to sign a postnuptial agreement might save them from unnecessary heartache and financial disputes in the long-run.

It is important to remember that the situation can change at any time during the marriage. What may seem fair at the beginning of a marriage when there are no children may seem very different when a family breaks up.

A postnuptial agreement can cover in detail what will happen to:

  • personal and jointly owned assets and belongings;
  • personal and joint debts;
  • significant gifts;
  • inheritance received and expected;
  • occupation of a family home or second home;
  • ownership of property and land;
  • business operation;
  • spousal maintenance payments;
  • pension splitting or earmarking; and
  • provisions for continued support to be made in wills.

Postnuptial agreements can be particularly relevant where the financial situation has changed during the course of the marriage. This might be through a successful business venture, a windfall payment like an inheritance or lottery win, or through the generosity of a gift from one set of parents.

On divorce or civil partnership dissolution all the ‘assets of the marriage’ are usually considered to be part of a pot that can be divided between both people equally, or as decided through negotiation or by a court. Couples are encouraged by the court to use mediation as a means to reach an agreement for financial settlement. The mediation process can be equally useful in deciding the terms of a postnuptial agreement.

By recording the terms of their agreement in a postnuptial agreement, it may be possible to ring-fence certain assets received from one side of the family and protect them in the case of future relationship breakdown.

As with any contract, a postnuptial agreement may be challenged, but if certain conditions are satisfied the court is more likely to uphold it.

As long as there was no undue duress, both people had independent legal advice and the terms of the agreement were fair at the time – they can apply to the court to enforce a postnuptial agreement.

The law in this area is complex and constantly changing. Your solicitor will need to look at all the factors surrounding the postnuptial agreement and will give you specific legal advice according to your personal circumstances.

For a confidential discussion on any family law issues contact Janet Tresman, family law consultant at Altermans Law, on 0208 346 1777 or send an email to her, to email hidden; JavaScript is required.

Janet Tresman is a highly experienced family law mediator and collaborative family law solicitor, representing amongst others, high net worth individuals. She is a founding member of Resolution and has served as a Deputy District Judge. Janet delivers a first class service in all aspects of family law, with minimum court intervention.