Like a pre-nuptial agreement, it sets out the financial arrangements that the parties will be bound by in the event that the marriage ever breaks down. The parties can enter into this type of agreement at any time after the marriage takes place and before the marriage breaks down.

There are many reasons that parties may wish to set out their financial arrangements in a written agreement of this type: one of the parties may have inherited or expects to inherit a sum of money that they wish to protect; the parties may have encountered a marital difficulty that they have agreed to work through and have agreed that entering into a post nuptial agreement will avoid unnecessary financial arguments, either in endeavouring to reconcile or in the event that the reconciliation fails and the marriage ends.

It has become increasingly common for couples to formalise their financial arrangements to allow them a greater level of certainty and autonomy in the event of permanent separation or divorce.

It is important that anyone entering into this type of agreement understands the nature of the other party’s finances. Both parties are expected to be clear and frank with each other about the value of their assets and debts. 

This includes business assets, pensions and offshore investments. They both must understand the nature of the agreement, it helps if they have both taken independent legal advice on the terms of the agreement before they sign on the dotted line. 

Both parties must enter into the agreement freely, there must be no pressure by one party one the other to sign the agreement. If there is pressure then the agreement may not be upheld as being binding by the court when the parties divorce.

Overall, the agreement must be fair to both parties, the court will want to see that the financial needs of their children have been satisfied in the agreement. If the agreement states that one party gets everything and the other party gets nothing, it is not likely to be a fair agreement and therefore won’t be upheld by the court.

Ultimately the court has the power to make an order that it thinks is fair in all the circumstances. If the agreement is properly drafted and entered into by the parties it is highly unlikely that the court will interfere with the agreement reached by the parties.