A Postnuptial Agreement (also called a post-marital agreement or, informally, a postnup) is a written contract entered into by two people who are already married, setting out how their assets, property, debts, and financial affairs will be handled if the marriage breaks down. Unlike a prenuptial agreement, which is signed before the wedding, a postnuptial agreement is made after the marriage has taken place.

In England and Wales, the legal status of postnuptial agreements is distinct from that of prenuptial agreements. In the landmark Privy Council decision of MacLeod v MacLeod [2008] UKPC 64, it was confirmed that a postnuptial agreement is a valid and enforceable contract between spouses at common law. This is because, unlike a prenuptial agreement, a postnuptial agreement is not made in contemplation of marriage and was not historically considered contrary to public policy. The Privy Council held that such agreements are binding as contracts, and the court will enforce them in financial proceedings on divorce, subject to the court's overriding jurisdiction under the Matrimonial Causes Act 1973.

The subsequent Supreme Court decision in Radmacher v Granatino [2010] UKSC 42, which primarily addressed prenuptial agreements, set out three conditions that must be satisfied for the court to give decisive weight to any nuptial agreement — conditions that apply equally to postnuptial agreements. First, the agreement must have been freely entered into by each party without undue influence, duress, or exploitation of a dominant position. Second, each party must have had a full appreciation of the implications of the agreement, which in practice requires independent legal advice from a separate solicitor. Third, it must not be unfair to hold the parties to the agreement in the prevailing circumstances at the time of the divorce proceedings.

A postnuptial agreement governed by the laws of England and Wales will typically address the division of separately owned assets (those brought to the marriage or inherited during it), the treatment of the matrimonial home, jointly acquired property, spousal maintenance, pension entitlements under the Welfare Reform and Pensions Act 1999, business interests, debts and liabilities, and financial provision for children. Full and frank financial disclosure by both spouses is essential — any material non-disclosure may undermine the enforceability of the agreement as a matter of contract law.

The Matrimonial Causes Act 1973 remains the primary statute governing financial provision on divorce in England and Wales. The court's powers under sections 23, 24, and 24B of the Act — to make periodical payments orders, lump sum orders, property adjustment orders, and pension sharing orders — cannot be ousted by any private agreement. However, a properly executed postnuptial agreement that satisfies the MacLeod and Radmacher conditions will be given significant, and potentially decisive, weight by the court as one of the circumstances of the case under section 25 of the Act.

A postnuptial agreement is appropriate for married couples in England and Wales who wish to create or update financial arrangements during the course of the marriage, either because they did not enter into a prenuptial agreement before the wedding or because circumstances have changed materially since the marriage took place.

One of the most common reasons for entering into a postnuptial agreement is the receipt of a significant inheritance or gift during the marriage. Where one spouse inherits a family home, a portfolio of investments, or other substantial assets from a deceased relative, a postnuptial agreement can ring-fence those inherited assets as the sole property of the receiving spouse, preventing them from being treated as part of the matrimonial pool for division on divorce.

A postnuptial agreement is also frequently used where one spouse starts or acquires a business during the marriage. The agreement can specify that the business remains the sole property of the owning spouse, avoiding the disruption and expense of a business valuation and potential forced sale that can result from contested financial proceedings on divorce. Where the business involves third-party shareholders or partners, protecting the business through a postnuptial agreement may also be required to meet the obligations owed to those third parties.

Couples who experienced a period of marital difficulty — such as a separation or a disclosure of significant financial problems — and have subsequently reconciled sometimes use a postnuptial agreement as part of the terms of their reconciliation. This can provide both parties with certainty and clarity about their respective financial positions and obligations going forward.

A postnuptial agreement is also suitable where one spouse's financial circumstances have changed significantly during the marriage. This may include a substantial promotion or career change, the sale of a business at a profit, or a significant change in investment portfolio values. Where one party's wealth has grown substantially during the marriage, a postnuptial agreement can address how that new wealth will be treated in the event of divorce.

For couples who are moving to England and Wales from another jurisdiction, a postnuptial agreement provides certainty about which country's laws will govern the financial consequences of any future divorce, given that the financial remedies available under the Matrimonial Causes Act 1973 are among the most generous in the world for the financially weaker party. Finally, couples who simply wish to update or replace a prenuptial agreement entered into before the marriage will commonly do so by way of a postnuptial agreement.

A well-drafted postnuptial agreement for England and Wales must satisfy the conditions established in MacLeod v MacLeod [2008] UKPC 64 and Radmacher v Granatino [2010] UKSC 42, and must be structured to withstand scrutiny in the Family Division of the High Court or in a County Court hearing financial proceedings on divorce.

The first essential element is independent legal advice. Both spouses must receive advice from their own separate solicitor who specialises in family law. Each solicitor should explain the terms of the agreement, the rights the client may be giving up, the likely outcome on divorce without the agreement, and provide a signed certificate confirming that independent legal advice was given. Using the same solicitor for both parties creates an irresolvable conflict of interest and will seriously undermine the court's confidence in the agreement.

The second essential element is full and frank financial disclosure. Both parties must disclose all of their assets, liabilities, income, and financial resources. The disclosure should be comprehensive and, where possible, supported by documentary evidence such as valuations, bank statements, and pension statements. Non-disclosure of any material asset or liability is one of the primary grounds on which a court will decline to uphold a postnuptial agreement as a matter of contract law.

The substantive terms of a postnuptial agreement should address several key areas. Separate property: a schedule setting out each spouse's separately owned assets as at the date of the agreement, confirming that these assets shall remain the sole property of the owning spouse and shall not form part of the matrimonial pool for division on divorce. This should include pre-marital assets, inheritances, and gifts received from third parties during the marriage. Jointly acquired assets: provisions setting out how property and assets acquired jointly during the marriage (savings, investments, vehicles, and household contents) will be divided on separation. The matrimonial home: specific provisions for the treatment of the family home, including ownership, mortgage responsibility, and the agreed arrangement on separation — such as a sale with division of net proceeds, or a transfer to one party in exchange for a balancing payment. Spousal maintenance: whether a clean break is intended under section 25A of the Matrimonial Causes Act 1973, or whether periodical payments will be available, and on what terms including duration and any variation triggers. Pension entitlements: the agreed treatment of each party's pension under the Welfare Reform and Pensions Act 1999, including whether pension sharing orders are anticipated. Business interests: protection for any business owned or operated by either party, including provisions to prevent forced sale or compulsory valuation. Debts and liabilities: an allocation of responsibility for pre-existing and ongoing debts. Financial provision for children: while the agreement cannot predetermine custody arrangements (which are governed by the paramountcy principle under section 1(1) of the Children Act 1989), it can address financial support for children. A review clause is strongly recommended to ensure the agreement remains fair as circumstances change, particularly following the birth of children or a material change in either party's financial position.