With enormous divorce settlements becoming an almost daily tabloid headline, it comes as no surprise that divorce lawyers are increasingly asked by wealthy individuals considering a trip down the aisle, if there is anything they can do to protect themselves and their wealth if it all goes wrong.

While no-one goes into a marriage or civil partnership with the intention of breaking up, and as most of us are guided by hearts rather than heads, pre-nups are not always forefront in people’s minds before taking that walk down the aisle. So if you have already had the Big Day but want to avoid the possible Big Payout later, then what are the options?

Most people are familiar with the concept of a pre-nuptial agreement even if they are not entirely sure how it works and how effective it can be. The post-nuptial agreement, however, is more of an anomaly. It is not wildly different from a pre-nuptial agreement save for one very important factor – it is signed after the marriage rather than before. In all other ways it is really the same, giving you the same protection you would have had, had you considered it before.

What is the point of a pre or post-nuptial agreement?

To limit the settlement on a divorce. In short, it allows the wealthier spouse to protect their assets. For example you can try to exclude certain assets from the marital pot altogether and keep them for yourself after divorce. Judges in England have very wide powers indeed over the sort of orders that they make, and the outcome can be very hard to predict. Orders are often very generous. Indeed, London is considered to be the "divorce capital of the world". A pre-nup or post-nup gives the spouses the power to control the size of that settlement.

To avoid acrimony - The settlement is decided at a time when the spouses are on good terms meaning they are much more like to agree on a split of assets. By contrast, if there is a divorce underway and things have turned sour then an agreement can be much harder to achieve.

To avoid cost - It can avoid massive legal costs. A court fight over the right settlement can cost tens of thousands. If the spouses decide amongst themselves in advance then there should be nothing left to argue over.

Isn’t it true that they are not legally enforceable though? What is the point of signing one if I can’t be sure it’ll protect me?

It is true that pre-nups and post-nups are not yet watertight under current law. That is to say that a judge can still decide to ignore it altogether or vary its terms. However it is generally the case that judges these days will only disregard or vary such agreements if there is very good reason for doing so.

Over the years, it has been widely recognised that it is unfair to prevent people from regulating their own financial affairs if they want to, particularly in England and Wales where divorce settlements are so high and the outcome is so uncertain. In the rest of mainland Europe a pre-nuptial or post-nuptial agreement is fully enforceable.

So provided your document is well-drafted and certain important safeguards have been taken there is a very high chance that its terms will be followed.

So how do I give my pre-nup or post-nuptial agreement the best chance of being upheld?

Several cases have laid down the rules and it is very important that they are observed:

Legal advice – no pre-nup or post-nup is worth the paper is written on unless both spouses have taken independent legal advice. Each solicitor will then sign a certificate confirming that their client understands the document and the impact of signing it.

Free will – A pre or post-nup must have been signed with sufficient time for both parties to have thought about it and with no pressure on either side to sign it. To avoid the suggestion that either party was forced to sign it on the eve of the wedding, it is preferable for a pre-nup to be signed around 6 weeks before the wedding but at the very least 3 weeks before. If this is not possible, it is better to wait and make the agreement after, when there can be no accusations of time pressure.

Openness – both spouses must have given to the other full details of their financial position so that each spouse fully understands the impact of signing the document.

So, assuming that I have observed the three points above, is my contract home and dry?

Not quite but you are a long way towards it. The final hurdle that must be crossed is demonstrating that the deal is not profoundly unfair in some very fundamental sense. It will not be considered unfair simply because some judges would have awarded more – after all that is often the reason they are signed – but the following situations could give rise to a problem:

• children have been born during the marriage that now mean it would be unfair as the document fails to provide for this eventuality;
• the agreement fails to provide for the spouse's most basic housing needs;
• it is far below any order that a court might conceivably make; and
• There is considerably more wealth than there was at the time of signing which rendering the original agreement unfair.

This is where the importance of good drafting comes in. A good pre-nup or post nup will not go too far or try to keep everything for the wealthy party. It must make reasonable provision and it must deal with future events such as the birth of children and how that will impact on the settlement.

When would a post-nuptial agreement ever be better than a pre-nuptial agreement?

Never. It is often the case, however, that the issue of having a pre-nuptial agreement is raised very late in the day. It is often a difficult or sensitive issue for one spouse to raise. If wedding preparations are already underway then there can be little time to consider the matter properly and give it the proper attention it deserves. If that means that there will be delay before it is signed there is the risk that one spouse will later argue that it was signed too close to the wedding and that they felt under pressure To avoid this risk, the document can be signed after the wedding instead when there is time for proper reflection and consideration.

Are there any disadvantages of a post-nuptial over a pre-nup?

Yes, only one but it is a very big one. If the spouse won’t sign then it is too late to back out of the wedding!

Anne Kay is a solicitor in the Family Law team at Boodle Hatfield. She can be reached via email: akay@boodlehatfield.com