When two people get married, sharing their financial assets (properties, bank accounts, debts, and so forth) is an integral part of the arrangement. If they then get divorced, those assets are divided up between them — either an even half-and-half or an “equitable” split, depending on the applicable state laws covering marital property. Couples can change the way property is divided at the end of a marriage by entering into agreements on the subject. The most common such agreements are prenuptial, or “prenups.” “Postnuptial” agreements are a viable alternative, drawn up after the marriage instead of before it.
The Differences Between Postnuptial Agreements And Prenups
Prenuptial agreements are particularly common in states with “community property” laws for divorce. Wealthy individuals, in particular, are eager to protect themselves from the 50/50 split that the law would impose without an agreement like a prenup. Prenups are also commonly used to protect one spouse from the other’s debt or to safeguard an interest in a business.
Postnups govern the same circumstances as prenups, differing, as their name suggests, primarily in when they are entered into — after the marriage (or civil union) instead of before. Postnuptial agreements were once practically unenforceable, but the spread of “no-fault” divorce laws in the 1970s changed that dramatically.
From a legal standpoint, the timing is the only thing separating postnups from prenups once they are entered into. The rules governing setting them up are a little different, though. Each spouse has to have separate counsel to draft a prenuptial agreement. In contrast, spouses can (in most states) use the same attorney to draft a postnuptial agreement. The court will always scrutinize a postnuptial agreement more carefully for fairness if the spouses shared the same attorney, though.
Situations That Are Suitable To Postnuptial Agreements
Many individuals are simply uninterested in considering the possibility of a divorce when they are preparing for a wedding. When one is thinking of marriage in terms of a lifetime commitment, a prenup seems to be a useless and even possibly insulting instrument.
One or both spouse’s opinions on the matter of financial arrangements for divorce can change over time. Postnuptial agreements can lay out ground rules in such situations.
A postnup can also be employed to replace a prenup if the spouses who entered into it want to alter their financial arrangements after getting married.
Finally, postnuptial agreements may be entered into by couples already planning for a divorce or legal separation. Postnups can help streamline the divorce process and reduce legal expenses. A comprehensive postnup that addresses the division of property and spousal support can be incorporated directly into a divorce decree — though the court is not bound to honor a postnup.
Additional circumstances that may make a postnuptial agreement attractive to married partners include:
* To make clear that certain assets should be inherited by children from a previous relationship.
* To protect one spouse if the other has made irresponsible financial decisions (e.g. taking on excessive debt).
* When one spouse devotes him or herself to full-time childcare and wants to secure financial resources for childcare in the event of a divorce.
* To simply clarify each spouse’s intentions regarding the assets they bring into the marriage.
What Inclusions Are Valid In A Postnuptial Agreement?
Postnuptial agreements can set out provisions for dividing property and assets, establish parameters for spousal support; address the division of debts, and specify what happens to assets if one spouse dies. Like a prenuptial agreement, a postnuptial agreement cannot lay out provisions for child custody or child support.
Certain conditions will inevitably invalidate a Postnuptial agreement. These are the most common:
* The agreement has not been set in writing
* One party signed the agreement under duress
* One party was not able to (e.g. did not have time to) read the agreement before signing
* The agreement contains incomplete or false information
* The agreement contains invalid provisions
* The parties to the agreement did not have independent counsel in states where this is required (e.g. South Carolina, Minnesota)
* The agreement is unconscionable, i.e. manifestly unfair to one party
Consult An Experienced Attorney If You Need A Postnuptial Agreement
A postnuptial agreement may be the perfect way to secure your financial future if your ideas, attitude, or situation changes after you get married. If you want certain financial protections in the event of a divorce, a postnuptial agreement can secure them for you. Postnups aren’t suitable for all couples, but when the circumstances are right, they can deliver tremendous peace of mind. To learn more about postnuptial agreements and whether they’re right for you, seek the advice of a local family law attorney like Toporowska Law.