Cases relating to pre-nuptial agreements crop up quite frequently, and the way that they are dealt with by the courts is well known.
But what of post-nuptial agreements, i.e. agreements entered into after the marriage? How do the courts deal with them?
The answer is that the courts deal with all matrimonial agreements in the same way, irrespective of whether they were entered into before or after the marriage.
A recent Family Court case provides a useful demonstration of the court’s approach to post-nuptial agreements, albeit that the facts of the case were somewhat unusual.
The facts were that the parties were married in 2004 and separated in 2008, when the wife left the former matrimonial home. The wife issued judicial separation proceedings and in about November 2008 the parties agreed a financial settlement.
There is some confusion about the terms of the agreement, but essentially it provided for the equity in the former matrimonial home, the only asset, to be divided equally, in full and final settlement.
The former matrimonial home was owned by the husband. It was then worth about £280,000, and the equity was some £60,000.
The agreement gave the wife the opportunity to raise a mortgage to buy out the husband, failing which the husband would pay the wife £30,000 for her ‘share’.
The agreement was made into a consent court order, but the order did not take effect, because the judicial separation proceedings were never concluded. The agreement was never implemented.
The judicial separation proceedings were eventually dismissed, in 2019. This, as the judge said, had the effect of ‘morphing’ the 2008 agreement into a simple post-nuptial marital agreement.
Divorce proceedings were subsequently issued by the husband, and the court had to decide what to do with the agreement.
Both parties indicated that they were content with the terms of the 2008 agreement, but they differed as to how it should be implemented.
The husband wanted the court to order that he should pay the wife £30,000, although he was prepared to add another £10,000 to that, to take inflation into account.
The wife, on the other hand, invited the court to implement the 2008 agreement in such a way as to give her the opportunity to have the former matrimonial home transferred to her or, in the alternative, sold and the proceeds divided equally. This would amount to an order in the region of about £250,000 – £300,000.
The judge explained that the court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications, unless in the circumstances prevailing it would not be fair to hold the parties to the agreement.
The only reason why the judge did not consider that the parties should be held to the agreement was due to the passage of time and the change in the value of money.
He considered that the husband’s offer of £10,000 to uprate the £30,000 was not enough in the circumstances.
He preferred to look at what the £30,000 was as a percentage of the gross value in 2008 (say 30/280 = 10.71%), and then apply that to the gross value of the property in 2022, which is in the order of £525,000, making the 2022 figure £56,227.
He then rounded that figure up to £60,000, in full and final settlement.
So the answer to the question is yes, the court can certainly hold you to a post-nuptial agreement, unless it considers that it would be unfair to do so, as would have been the case here if the wife only received the original sum of £30,000.
The full report of the case can be found here.
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