More cou­ples are sign­ing ‘post-nups’

More cou­ples – es­pe­cially where one in­her­its – draw up ‘post-nups’ to keep new wealth for them­selves, says Laura Suter

The Sunday Telegraph - Money & Business - - Money -

Gone are the days when mar­ried peo­ple agreed to split their as­sets 50:50. More and more are draw­ing up “post­nup” agree­ments, some­times long af­ter their mar­riage – trig­gered by a fi­nan­cial event such as re­ceiv­ing a wind­fall.

Much like a pre-nup­tial agree­ment – which takes place be­fore the wed­ding – post-nups lay out how as­sets will be split on di­vorce.

They are ru­moured to have been used by celebrity cou­ples, such as Bey­oncé and Jay Z, to split their as­sets af­ter both amassed sig­nif­i­cant earn­ings. A post-nup was also re­ferred to in the di­vorce case of dis­graced Amer­i­can politi­cian Eliot Spitzer and his for­mer wife Silda in 2014.

No fig­ures are col­lated about the num­ber of post-nups drawn up each year, as they are pri­vate ar­range­ments, but lawyers say they are see­ing more and more peo­ple ask for them.

“In the past three to four years there has been quite a dra­matic rise in the num­ber of post-nup agree­ments,” said Rosie Schumm, a part­ner at law firm Forsters. “It is true they are un­ro­man­tic, but any wealthy fam­ily should con­sider them as they are the best way to pro­tect as­sets in a di­vorce.”

Prompts for post-nups

Cou­ples’ rea­sons for get­ting a post­nup vary, say lawyers.

“The high-pro­file press cov­er­age of divorces makes peo­ple more con­scious that they want to pro­tect their wealth,” said Jeetesh Pa­tel, a part­ner in fam­ily law at Hodge Jones & Allen.

The most pop­u­lar rea­son is where one half of the cou­ple un­ex­pect­edly comes into money and wants to pro­tect it. This can be money gained from an in­vest­ment or from an in­her­i­tance that they want to ringfence. Sec­ond mar­riages and more com­pli­cated fam­ily struc­tures also make the need for post-nups greater.

Mr Pa­tel said: “Say the hus­band has come in for a big in­her­i­tance, but has chil­dren from a pre­vi­ous mar­riage. He will want a post-nup to pro­tect his in­her­i­tance and en­sure his two chil­dren out­side the mar­riage are pro­tected as well.”

With more younger cou­ples re­ly­ing on the “Bank of Mum and Dad” to help them get on the prop­erty lad­der, some par­ents are in­sist­ing on post­nups to pro­tect their gift in the case of a di­vorce.

Mr Pa­tel said he had one in­stance where a fa­ther, who was a prop­erty de­vel­oper, was put­ting prop­er­ties in his mar­ried daugh­ters’ names for tax rea­sons. He in­sisted they got a post­nup to pro­tect his wealth “walk­ing out of the door with his sons-in-law” if they di­vorced.

Those in sec­ond mar­riages, who have built up con­sid­er­able wealth, in­vest­ments or have their own busi­ness may also want a post-nup to pro­tect their money, said Mr Pa­tel. While a prenup in­volves tricky con­ver­sa­tions be­fore the mar­riage has taken place, those get­ting a post­nup have more time, and of­ten less emo­tion, in­volved.

In other cases – al­beit rarer – cou­ples are get­ting post-nups af­ter one spouse has cheated. This is usu­ally to clear up fi­nan­cial af­fairs and of­fer some form of se­cu­rity, pos­si­bly as a pre­cur­sor to an even­tual di­vorce. “When one party has had an af­fair, the wife of­ten says to the hus­band, ‘if we’re go­ing to re­store trust, I want to know I am go­ing to be all right fi­nan­cially’,” said Ms Schumm. “Lots of lawyers will say that it should be a pre­req­ui­site be­fore the wife goes back into the mar­riage.”

There have also been cases where a cou­ple agree a post-nup in­clud­ing fi­nan­cial penal­ties if the cheat­ing part­ner strays again.

Post-nups are not al­ways for cyn­i­cal rea­sons. Some cou­ples get them to set in stone the out­come that all as­sets, and cus­tody of any chil­dren, will be split down the mid­dle in the event of di­vorce. “I’ve had one of those, a very won­der­ful sit­u­a­tion that was all about shared par­ent­ing, shared as­sets and an egal­i­tar­ian ap­proach to their as­sets. It is en­cour­ag­ing as a con­cept,” said Ms Schumm.

Mr Pa­tel said that courts could well rule against this if they de­ter­mine that one side of the cou­ple needs more money than the other.

But how do you get a post-nup?

Like a prenup, post-nup agree­ments are not legally bind­ing. There are on­go­ing le­gal dis­cus­sions about whether the law should be changed, but as things cur­rently stand, the court has the fi­nal de­ci­sion.

How­ever, such has been the rise in the use of the agree­ments that they are now se­ri­ously con­sid­ered by di­vorce courts.

There are cer­tain rules that cou­ples have to abide by to en­sure the court con­sid­ers the doc­u­ment. Each half of the cou­ple must use spe­cial­ist le­gal ad­vis­ers, at sep­a­rate law firms, which Ms Schumm ad­mits can mean that costs mount up.

“There are ways of keep­ing the costs at a rea­son­able level. It de­pends on the com­plex­ity of the case. Of­ten, if there are com­plex trust struc­tures or cross-ju­ris­dic­tional el­e­ments, it will be more ex­pen­sive,” she added.

Cou­ples also need to en­sure that all rel­e­vant fi­nances and as­sets are de­clared, that the post-nup is not un­fairly weighted in one per­son’s favour, and that any chil­dren or de­pen­dants will be sup­ported.

No one party must be put un­der duress or pres­sure to sign the agree­ment ei­ther, as this will in­val­i­date it, added Ms Schumm.

She ad­mit­ted that there would al­most al­ways be one per­son who wanted the agree­ment more than the other – which could lead to some tricky con­ver­sa­tions.

“It can ex­pose con­tentions,” she said. “In the end it’s some­thing that can save a mar­riage but it can also break a mar­riage.”

‘Any wealthy fam­ily should con­sider them as they are the best way to pro­tect as­sets’

Lawyer Rosie Schumm says more clients want post-nups

In­tol­er­a­ble Cruelty, the hit film, was based on a cou­ple’s use of a pre-nup – but post-nups are the grow­ing area

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