Quick guide to pre-nups and spousal maintenance

Prenuptial and postnuptial agreements

Although it's probably not the most romantic thing you'll do before getting married, a prenuptial agreement can be an effective way to protect yourself from a nasty divorce.

These agreements aren't legally binding but, providing they're not outlandish and have been drawn up correctly, the courts will take them into consideration.

"It is a statement of intent. They can be overturned, and a judge might throw out some of the clauses, but they are becoming more watertight," says Jill Goldman, partner at Thomas Eggar.

To ensure a prenuptial agreement has a chance of standing up in court, each party needs to take independent legal advice at least three weeks before the wedding.

Even if you're already married, a postnuptial agreement may be worth considering.

This agreement is usually considered when a marriage is showing signs of breakdown, and it enables both parties to make decisions about sharing assets before everything becomes too emotionally fraught.

The cost for a prenuptial or postnuptial agreement depends on the amount of advice required, but you can expect to pay around £1,000.

Spousal maintenance

Ongoing spousal maintenance is a part of many divorce settlements, especially where it has been a long marriage with one party giving up a career to look after the home or family.

However, while it may take months to determine the correct level of maintenance, the amount you receive or pay can be affected in a number of ways.

"If the person receiving the maintenance remarries the maintenance stops," says Jill Goldman, partner at Thomas Eggar. "If he or she co-habits there's no legal requirement for it to stop."
The financial affairs of the person making the payments are a significant factor, with payments potentially fluctuating in line with their earnings.

"The level of maintenance you'll receive is affected by their ability to pay it," says Henry Brookman, senior partner at Brookman Solicitors. "If they don't have the income they might not be able to pay the level of maintenance that was agreed."

But even if someone is declared bankrupt, this doesn't necessarily mean the end of maintenance payments. "Someone could be declared bankrupt on 30 June, but could be earning money on 1 July," explains Brookman.

"The trustees will determine what happens to their income, which will include a living allowance for the bankrupt, but they will also look at other obligations, including maintenance to the former spouse."
To avoid seeing your maintenance payments disappear, it could be worth opting for a one-off settlement rather than ongoing maintenance.

This gives greater freedom and removes the uncertainty about what you'll receive in the future. Brookman explains: "I acted for the wife of a property developer at the point when the housing market was beginning to get tough.

"We had the option of taking a lump sum or settling for ongoing maintenance. Given the circumstances, we took the lump sum."

This article was originally published in Money Observer - Moneywise's sister publication - in August 2010

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