Can I Use a Post-Nup to Ringfence My Inheritance?

Dealing with marital finances can be complicated, particularly when it comes to protecting individual assets such as inheritance. One solution to try to protect personal assets in the event of a divorce is through a post-nuptial agreement. This article explains the benefits of post-nuptial agreements, focusing on how to protect an inheritance received by one spouse.

A post-nuptial agreement (a post-nup) is a written contract executed by a couple after they are married or have entered a civil partnership. The agreement typically outlines how the couple intend for their assets to be divided in the event of a separation or divorce. The benefits of entering into a post-nuptial agreement include:

• Clarity and Certainty: It provides clear guidelines on how the parties intend for their assets, including personal inheritances, savings, and investments, to be treated on divorce.
• Protection of Assets: It can protect from future marital claims on both pre-marital assets as well as those accrued during the marriage, including those received by way of gift and inheritance.
• Reduction of Conflict: By agreeing on the division of assets beforehand, couples can reduce potential conflicts in the event of a divorce.
• Financial Independence: Each party can maintain financial independence and control over their pre-marital and post-marital assets.

Inheritance can be a significant concern in marriages, especially when these assets are substantial. Having a post-nup can increase the chances of ringfencing your inheritance on a divorce. Ringfencing means it will be ignored in the divorce settlement. The agreement can specify that any inherited assets will remain the property of the inheritor in the event of a divorce. However, it is crucial to ensure that the inheritance remains separate and is not mingled with marital assets, as this can make it more difficult to argue for it to be ringfenced on divorce.

While post-nups are not automatically legally binding in England and Wales, they are given significant weight in the courts and are likely to be followed provided the following conditions are met:

• Fair to both parties: The agreement must not unduly prejudice either party, especially in the provision of needs, including those of any children.
• Entered into freely: Both parties must voluntarily agree to the agreement without coercion or duress.
• Fully informed: Both parties should have a clear understanding of the implications of the agreement, ideally with independent legal advice.
• Up-to-date: The agreement should be updated regularly to reflect any significant changes in circumstances, such as the birth of a child.

Couples may opt for a post-nup for various reasons, such as:

• Change in Financial Circumstances: Significant changes, such as receiving an inheritance, a spouse starting a business, or a change in career, might prompt a post-nup.
• Children: To ensure any children are provided for.
• After a Marital Breakdown: Following a period of separation or marital difficulties, couples might use a post-nup to create a new financial understanding as they reconcile.
• Tax Considerations: To address potential tax implications of transferring assets.

Post-nups offer a pragmatic approach to managing marital finances and protecting individual assets such as inheritance. They provide a framework that can save both emotional and financial strain in the event of a divorce.

If you are considering a post-nuptial agreement, it is advisable to consult with a specialist family law solicitor who can ensure that the agreement is drafted correctly, meets all legal requirements, and reflects your intentions. This legal step can provide peace of mind, knowing that your assets are protected according to your wishes.

Ready to take the next step? As leading family lawyers in Milton Keynes, our team of family law specialists can advise you about your divorce. As well as our head office in Milton Keynes, we also have solicitors in Bicester, Watford, and Central London where we can arrange appointments to see you in person. Talk to us in confidence and find out where you stand. Get in touch – we’re here to help.

This article is intended for the use of our clients and other interested parties. The information contained in it reflects the author’s view and is believed to be correct at the date of publication. However, it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional legal advice.