What is a Postnuptial Agreement?

A couple can create a postnuptial agreement (postnup) at any time during their marriage. It includes many of the same terms regarding ownership of marital assets as a prenuptial agreement, such as:

• Real estate properties
• Personal financial assets
• Bank accounts
• Debts

A postnup can also contain terms for child support and child custody, if the marriage ends.

This article shares the basics of postnuptial agreements. Learn more about:

• The difference between prenuptial and postnuptial agreements
• When is the postnuptial agreement applicable?
• What can you include in an enforceable postnuptial agreement?
• And more

The Difference Between Prenuptial and Postnuptial Agreements

A prenuptial agreement is a legal step taken by couples before getting married. The agreement establishes:

• Division of assets
• Financial rights
• Other matters if the couple divorces

This agreement also protects family businesses, avoids shared debt, and provides guidance on each spouse's financial responsibilities during the marriage. Prenuptial agreements are also called “pre-marital agreements" or “prenups."

Meanwhile, spouses contract postnuptial agreements after marriage. In some cases, they sign it years after getting married. It contains a fair disclosure of the couple's financial circumstances and the division of assets and liabilities in case of divorce.

The agreement may also detail the couple's responsibilities to children and other obligations during the marriage. Postnuptial agreements are also called “post-marital agreements" or “postnup."

The postnuptial gained more recognition in the United States after more states adopted the “no-fault" divorce laws. Although postnups and prenups are somehow similar, they have differences. It is always best to consult a family law attorney to understand these contracts better.

When Is the Postnuptial Agreement Applicable?

After the excitement of the wedding ceremony, it is common for couples to revisit the idea of having a legal agreement.

A postnuptial agreement can also appeal to couples considering a legal separation, annulment, or divorce. It is a way to make the process easier and reduce the legal fees. When this happens, the agreement may include topics like:

• Division of separate property and community property
• Spousal support
• Other matters

They can incorporate the postnup into the divorce decree. But, the courts have the discretion to modify or reject these previous agreements, especially in cases where the court finds it unjust or the legal contract is not entered in good faith.

Married couples with existing prenups may also use a postnuptial agreement to change the terms of their prenup.

Other common reasons married partners may sign a postnuptial agreement include the following:

• To guarantee that children from previous relationships have certain inheritance rights
• 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. Thus, the spouse would like to secure some financial resources during a divorce
• A spouse receives a large inheritance or substantial financial gift
• Simply as a means of defining each party's wishes for assets brought to the marriage

What Can You Include in the Postnuptial Agreement?

Most postnuptial contracts include provisions related to the following:

• Division of property and assets after divorce
• The parameters for spousal support
• Division of debts
• What happens to assets after one party's death

Some states may impose restrictions on the division of marital property in a prenuptial agreement. But these restrictions are usually related to the right to alimony rather than property division itself.

Certain conditions, regardless of the contents of the postnup, may invalidate it, such as:

• There is no written agreement
• The agreement is fraudulent or entered under misrepresentation
• Unequal bargaining power among the parties
• One of the parties was pressured or signed under duress
• One of the parties wasn't given the proper opportunity to read, understand, and consider the agreement
• 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)
• The agreement is "unconscionable" (grossly unfair to one party)

These rules can be complex and may vary by state. Thus, consulting with professional legal counsel can help you understand the rules and regulations better. An experienced attorney can ensure the enforceability of your postnup.

How Much Does It Cost To Create a Postnuptial Agreement?

It depends on the attorney’s fees and the complexity of the contract. Most attorneys or law firms charge around $1,000 for a standard, enforceable prenup.

Postnups with complex conditions or a higher number of assets will be more expensive to draft. The level of negotiation required can also affect the price. The most intricate prenups can cost a couple up to $10,000.

Most attorneys will share their fee structure during the initial consultation.

Are There Alternatives To a Postnuptial Agreement, Like a Trust or Will?

If you are not concerned with the division of property, child support, or alimony, you may be able to achieve your goals with a different legal document.

A will is a legal document that specifies how your assets will be distributed after your death. While a will does not provide the same protection as a postnup during a divorce, it can ensure your wishes are carried out after your death.

A couple could use a trust to protect their assets during their lifetime and ensure a smooth transfer of assets to their beneficiaries after death. Further, a revocable living trust can be modified or revoked by the grantor during their lifetime. This can be a flexible alternative to a postnup for some couples, as it allows you to manage your assets while retaining control.

Couples can also use beneficiary designations to guarantee their assets are distributed according to their wishes. Spouses can designate beneficiaries for various financial instruments, including life insurance policies and retirement accounts.

A family law attorney can discuss your options and recommend the best legal tool for your circumstances.

Do You Need a Postnuptial Agreement? Consult a Family Law Attorney

A valid postnuptial agreement is one of the ways to safeguard each spouse's assets and have peace of mind. Even if you’ve been married for years, it’s not too late to protect your assets and and secure your financial future.

Consult a family law attorney if you want to learn more about post-nuptial agreements, They can guide you through the intricacies of postnuptial agreements. They can provide personalized legal advice under your state law, tailored to your unique circumstances.

Learn more about postnups from an experienced family law attorney near you.