When should you review or vary a nuptial agreement?
The fundamental requirement of a good nuptial agreement, which is likely to be upheld by the court in the event of divorce, is for it to be fair and to meet the needs of you and your spouse. Terms that were fair according to the circumstances when the agreement was drafted, may not be over the course of your marriage. It is therefore important to review the agreement when major life events occur that make the agreement unfair on one of you. You can’t predict what the future holds, but a review clause can try to identify any potential changes in circumstances that may make the original agreement unfair.
Potential trigger events for a review include:
- The birth of a child
- Moving the matrimonial home out of the jurisdiction
- You or your spouse becoming bankrupt, incapacitated or losing your job
- An asset of the marriage appreciating or depreciating significantly
Without a review on one of the above life events, there is a risk that the court on divorce could determine that the nuptial agreement does not meet each party’s needs and it will not be upheld.
The longer the marriage, the more likely it is that your circumstances will have changed and the more likely it is that it will be unfair to uphold the terms of the nuptial agreement. Often a review clause will provide that the agreement will be reviewed every 5 years to avoid this issue. You and your spouse can consider the changes in circumstances that have occurred in the previous 5 years and evaluate whether they require that the agreement be varied.
Any variation of the terms of the nuptial agreement should be formalised, and there are a number of criteria which should be complied with in order to make sure that the agreement has the best possible opportunity of being binding in the future.
Please contact Claire Tollefson on 01892 506191 or Claire.email@example.com for a free, no obligation telephone call to discuss variations to a nuptial agreement.