Postnuptial Agreement

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 What Is a Postnuptial Agreement?

A postnuptial agreement is an agreement that is entered into by two spouses during the marriage. It is also known as a post-marital agreement. It is similar to a prenuptial agreement, but is entered into after the parties are already married. This type of agreement provides terms for the division of property and/or income in the event of a separation, divorce, or death.

These types of agreements are common if a spouse independently owns a large number of properties or has a large number of assets prior to marriage. They are also commonly used when one spouse acquires a particularly valuable property or asset after marriage.

Are Postnuptial Agreements Enforceable?

The majority of states in the United States recognize postnuptial agreements. The rules on these types of agreements vary from state to state. Some states, such as Minnesota, have laws that govern postnuptial agreements while other states, such as Pennsylvania, treat postnuptial agreements implicitly through contract laws. In the event that a state does not provide applicable law, the court will rely on case law to determine the validity of a postnuptial agreement.

Individuals may take the following steps to increase the likelihood the postnuptial agreement will be enforced by the court:

  • Each spouse should obtain separate counsel;
  • Each spouse should fully and truthfully disclose all property and income;
  • The agreement should be in writing; and
  • The agreement should not contain provisions regarding child custody and/or child support.

Which Is Better: Prenuptial Agreement or Postnuptial Agreement?

Neither is necessarily a better option, since they may be able to serve the same function. Prenuptial agreements are entered into before a couple marries. After marriage, the circumstances of the relationship may change. In many cases, a postnuptial agreement is a result of this change occurring after marriage.

Changes in the relationship may include one spouse receiving a promotion, stock options, and/or an inheritance. These events can have a dramatic impact on the financial status of a marriage. 

Postnuptial agreements may also be used to amend a prenuptial agreement that already exists. It is important to note that in some cases, postnuptial agreements are subject to stricter examinations by a court because the individuals are presumed to have less bargaining power once married.

Why Do I Need a Postnuptial Agreement?

In many cases, a postnuptial agreement is created in order to provide terms of property division in the event the marriage ends. There are also other situations where a couple may create a postnuptial agreement, including:

  • One spouse is a stay-at-home spouse;
  • Requests from one spouse’s business;
  • An inheritance; and/or
  • Disputes over money.

In the event one spouse decides to remain at home and raise children, they will be completely depending on the other spouse for their income. A postnuptial agreement may ensure that spouse’s dependence during the marriage will not have a negative effect on their life if the marriage ends.

If one spouse is a business partner, other partners may want to ensure that a divorce will not cause unwanted ownership problems, such as the spouse being granted ownership rights in the company. It may also keep the spouse from obtaining profits or other assets from the company.

In the case of an inheritance, in-laws may wish to give property or assets to their children but not their children’s spouse. Postnuptial agreements allow inheritances to be passed according to the wishes of the deceased. 

Lastly, a postnuptial agreement may assist in disputes over money. Money is often a bitter dispute in a divorce proceeding and an agreement may ensure both spouses are treated fairly should the marriage end.

Why Can’t a Postnuptial Agreement Include Child Custody or Child Support?

Although there are usually no laws that strictly forbid the inclusion of child custody or support terms in a postnuptial agreement, courts are required to decide those terms according to the child’s best interest standard and not the terms of a postnuptial agreement. These agreements concern the best interest of the spouses, which is not always the same as the children’s. However, alimony, also known as spousal support, is often addressed in these agreements.

How Do I Terminate a Postnuptial Agreement?

Postnuptial agreements are like contracts, subject to certain rules, and may be terminated in certain situations, such as:

  • If one party signs under duress, or is forced to sign against their free will;
  • If one party does not provide complete disclosure of their assets; and/or
  • If the agreement is unconscionable, or grossly unfair to one spouse.

Do I Need an Attorney to Draft a Postnuptial Agreement?

Yes, it is important to have an experienced family lawyer assist you with the drafting of a postnuptial agreement. An attorney will advise you regarding what terms should be included and draft an agreement that will be enforceable in court. An attorney may also represent you during any disputes arising from the agreement, including court proceedings, if necessary.

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