We have covered the basics of prenuptial agreements and separation agreements, and today we will tell you all about another private contract you can enter with your spouse: a postnuptial agreement. Postnuptial agreements are entered into after marriage (hence the prefix “post”) but before a separation or during a separation, in anticipation of reconciling. Prenuptial Agreements are entered into prior to marriage largely to determine how property and debt will be held by prospective spouses after marriage. Separation Agreements are entered into after separation or immediately before resolving all issues arising out of the marriage (property settlement, debt distribution, and alimony). If the couple intends to divorce after a separation, they will enter into a separation agreement instead of a postnuptial agreement.
What is a postnuptial agreement?
A postnuptial agreement is a binding private contract entered into during a marriage that can address matters relating to property and debt distribution and spousal support in the event of a later separation or divorce. A postnuptial agreement cannot address child support or child custody. This type of agreement allows you to determine for yourself how your marital property will be distributed upon separation, rather than allowing a court to make that decision or negotiating the distribution upon a later separation. You can waive the right to file for equitable distribution with the court upon separation or divorce in a postnuptial agreement, as well.
Many postnuptial agreements address what would happen financially if either spouse had an affair—essentially establishing some financial consequences if adultery was to occur. Once the postnuptial agreement is finalized, each spouse understands the financial impact of what would happen if the marriage failed. It can strengthen each spouse’s commitment to saving the marriage and promote faithfulness if there are specific financial consequences for having an affair.
When should you have a postnuptial agreement?
A postnuptial agreement can be useful when you and your spouse have been going through a rough patch in your relationship, but you want to try to work things out. A postnuptial agreement can also be helpful if one spouse starts a business and does not want the assets or liabilities to become marital property or if a spouse has children from a prior relationship and wants to keep some or all property separate to provide for the children.
A postnuptial agreement can allow you to circumvent negotiations for property and debt distribution and spousal support if you end up separating later. A postnuptial agreement can also allow you to avoid the court system and an equitable distribution lawsuit if you were to head down the divorce path.
How do you make a valid postnuptial agreement?
The postnuptial agreement must be:
Do we each need a lawyer to get a postnuptial agreement?
Yes, it is best for each spouse to retain their own legal representation and receive independent legal advice regarding the terms of the postnuptial agreement. The postnuptial agreement terms may have a spouse waiving significant legal rights to property or spousal support. To ensure that the postnuptial agreement will be upheld in a court of law if ever challenged, you want to ensure that both spouses have their own lawyers.
Please contact our office if you are considering a postnuptial agreement to schedule a consultation.
Lindsey Dasher is the Managing Partner at Dasher Law PLLC