The Role of Pre and Post Nuptial Agreements in Personal Injury

Pre and post nuptial agreements ensure you are looked after, and your assets are safeguarded in divorce or dissolution. Many couples find discussing money matters tricky; however, these agreements are vital to getting your financial affairs in order. As part of the assets and finances stipulated, it is possible to include any personal injury settlement.

Julie Hatton, Partner in the Clinical Negligence Team, and Sarah Evans, Head of the Family Team at Coodes, explore the role of pre and post nuptial agreements in the case of personal injury settlements.

What is a pre nuptial and post nuptial agreement?

Pre nuptial and post nuptial agreements are contracts that seek to regulate financial affairs in the event of divorce or dissolution of a civil partnership. A pre nuptial agreement is entered into prior to marriage whilst a post nuptial agreement is entered into during marriage. Both set out what a couple intend to happen to their money and property if their marriage were to end.

While these agreements are not strictly legally binding in England and Wales, they may be decisive in a dispute. This is unless the effect of the agreement would be unfair. To improve the chances of the agreement being considered fair both parties will need to set out their financial circumstances. They will also need to take independent legal advice. If making a pre nuptial agreement, it should be entered into well in advance of the wedding.

Nuptial agreements are crafted to fit your personal circumstances and can cover a range of assets and finances. This includes how you will deal with joint bank accounts, the proceeds or property sale and maintenance for your children.

What are the benefits of a nuptial agreement?

The use of a nuptial agreement can provide more certainty to both parties, provided the agreement is entered into in accordance with the recommended guidelines. They can be effective as a means of wealth protection, protecting assets brought into a marriage by one party. As an example, this could be assets such as damages and inheritance.

Although not legally binding, an agreement will carry weight when determining how assets should be divided. This is only as long as it is freely entered into by both parties with a full appreciation of its implications unless the circumstances mean that it would not be fair.

Why does this matter in cases of personal injury?

If you have received a personal injury settlement, then it is possible to include this as part of a pre or post nuptial agreement. Although it is legally impossible to ringfence the personal injury award in divorce proceedings, if an agreement is entered during the relationship it demonstrates to the judge the intention of the award to remain with the Claimant.

How should you enter into a nuptial agreement?

Before starting the process of entering into a pre or post nuptial agreement, it’s important to make a list. Note all of your financial assets, income, liabilities you own or have an interest in and disclose your financial position to each other. You should discuss how these would be divided should you separate. Then, you will need to ask a family law solicitor to set them out in a pre or post nuptial agreement.

You each need to take independent legal advice before signing your pre pup. This will ensure you have not been unduly influenced. This should not be rushed, each of you should fully understand how they work and the implications of separating. This agreement should be entered into freely and willingly by both parties.

In addition, you are likely to need to regularly review the agreement. This is particularly important where there is a change in circumstances such as the birth of a child.

At Coodes our Family Team understand how sensitive these money conversations can be. We are here to help you navigate the complexities with personalised advice. If you are looking for expert support, you can contact Sarah Evans via email at sarah.evans@coodes.co.uk or call 01579 324 010.

Alternatively, you can contact Julie Hatton, Partner in the Clinical Negligence team at julie.hatton@coodes.co.uk or call 01326 214 036.