When a couple decides to get married, they inevitably agree to share their assets. These assets (property, bank accounts, debts, etc.) are subject to division in the event of a divorce, either a 50/50 or "equitable" split (depending on the marital property laws of your state). But in many states, couples also have the option of entering into agreements that set certain parameters for how property is divided (among other matters) should the marriage end.
Prenuptial agreements (or "prenups") -- entered into before the marriage -- are the most common, but "postnuptial" agreements are another option and, as the name implies, are entered into after a couple gets married. The following information provides a general overview of postnuptial agreements.
How Postnuptial Agreements Differ From Prenups
Prenuptial agreements are quite common among wealthy individuals, especially those in "community property" states, where marital property is divided down the middle after a marriage is dissolved. They're also used in situations where one party wants to safeguard a family business, avoid taking on the other party's debts, or to clarify financial responsibilities during the marriage.
Postnups are similar and typically address the same issues, but are of course entered into after a couple is married (or joined in a civil union). While postnups were once generally unenforceable, they increased in popularity after more states adopted "no-fault" divorce laws beginning in the 1970s. It is important to check with a local attorney to find out about the enforcement of these agreements in your state.
Legally, postnups differ from prenups only by the fact that they're entered into after a couple has already gotten married. Most states allow parties to a postnuptial agreement to use the same attorney but by doing so, the courts will more closely scrutinize the agreement for fairness. It is highly recommended that the parties have independent and separate counsel.
When Postnuptial Agreements May Make Sense
Since the prospect of handing your fiancé a prenup prior to the big day may seem antithetical to the concept of a lifetime commitment, couples who may benefit from such an agreement are likely to avoid the subject. However, after the honeymoon, one or both individuals may choose to revisit such provisions. Also, a couple that has signed a prenup may decide to scrap it after marriage and agree to new terms through a postnup.
Another reason a married couple may enter into a postnuptial agreement is if they're considering a divorce or legal separation and want to streamline the process (while minimizing legal expenses). In this context, a postnup could be incorporated into the divorce decree by addressing spousal support and division of property, although the court is not bound by these provisions.
Other reasons married partners may choose to sign a postnuptial agreement include the following:
- To make sure children from previous relationships are entitled to certain assets through inheritance.
- In the event that one of the parties, after the marriage, has taken on considerable debt or made irresponsible financial decisions.
- When one of the spouses stops working to care for minor children (and thus would like to secure a certain amount of financial resources in the event of a divorce).
- Simply as a means of clearly defining each party's wishes for assets brought to the marriage.
What May be Included in a Valid Postnuptial Agreement
Most postnuptial agreements include provisions related to the division of property and assets after divorce; the parameters for spousal support; division of debts; and what happens to assets after one party's death. Some states do not allow property division in a prenuptial agreement unless such agreement is concurrent with a separation or divorce
However, prenuptial and postnuptial agreements typically may not include provisions for child support and child custody.
Regardless of what's in the postnup, there are certain conditions that may invalidate it, including the following:
- There is no written agreement (it typically must be in writing);
- Agreement is fraudulent or entered under misrepresentation;
- Unequal bargaining power among the parties;
- One of the parties was pressured or signed it under duress;
- One of the parties wasn't allowed proper opportunity to read, understand, and consider it;
- Lack of financial disclosure;
- There are invalid provisions contrary to public policy;
- Contains false or incomplete information;
- Lack of independent counsel (in certain states, such as Minnesota and South Carolina); or
- Agreement is "unconscionable" (grossly unfair to one party).
Do You Need a Postnuptial Agreement? An Attorney Can Help
Whether you've decided after marriage that certain protections are warranted, or want assurances after becoming a stay-at-home dad that you'll be taken care of in the event of a divorce, you may want to consider a postnuptial agreement. It's not for everyone, but can be quite effective in some instances. Learn more about postnups from an experienced family law attorney near you.