What is a Postnuptial Agreement?
You don’t enter a marriage with a pessimistic perspective on how it will turn out. Most couples get married, hoping that they’ll be together forever, but the reality for many is that the union won’t last, which is why it’s worth looking into signing a postnuptial agreement.
But what is a postnuptial agreement? You’ve probably heard about prenuptial agreements before, but a postnuptial agreement may be something new to you.
In this article, we’ll talk at length about what postnuptial agreements are and how they work. We’ll also discuss whether they are options you should consider in your marriage. Please read on to learn more about the importance of the postnuptial agreement.
What Is a Postnuptial Agreement?
Marriage represents the legal union of two individuals. Upon getting married, the people involved form a partnership recognized by the law. As part of entering that partnership, the two spouses agree to share their assets.
In situations where the married individuals stay together, the sharing of assets becomes a non-issue. Not all marriages remain intact, however, and the involved parties may seek a divorce for one reason or another.
Throughout the divorce proceedings, they will discuss the subject of dividing assets. That is when the conversation can become contentious. Considering they discuss money, properties, and other assets, it’s not surprising to see both sides fighting for what they believe they deserve.
This is where the postnuptial agreement can prove helpful and valuable.
A detailed postnuptial agreement will get rid of the need for the two parties to bicker about dividing their assets. It may also lay out plans for how to deal with other matters related to the marriage. Having an agreement such as that in place will help expedite the divorce proceedings and prevent one side from taking advantage of the other.
How Does a Postnuptial Agreement Differ from a Prenuptial Agreement?
Inevitably, discussions involving postnuptial agreements will also lead to talks about prenuptial agreements. So, how do those two agreements differ from one another?
The biggest difference is the timing when they completed the two agreements. Prenuptial agreements are signed prior to the marriage, whereas the postnuptial pacts are after the ceremony.
They may also differ at times in terms of the representation of the two parties. For prenuptial agreements, the two parties must have different attorneys. The two parties can work with the same attorney when putting together a postnuptial pact, but they are advised to work with different legal professionals.
One more differentiating factor between prenuptial and postnuptial agreements is how common they are. According to this article from The Plunge, prenuptial agreements are way more common than postnuptial agreements.
That said, the article also acknowledges that postnuptial agreements are becoming more common. The day may come when both become routine elements of getting married.
What Are the Details Included in Postnuptial Agreements?
The contents of a postnuptial agreement must be detailed. They should clearly outline how you and your spouse want matters if the two of you divorce.
In this section of this article, we’ll discuss the details commonly included in postnuptial agreements. Keep them in mind to ensure that you don’t leave out something important
The Terms of Asset Division
Arguably the most important details included in any postnuptial agreement are the ones that outline how asset division will work. Be as specific as you can be when providing these details.
Provide specific monetary figures and clearly indicate which properties and other assets go to which spouse. There’s no such thing as being too meticulous in your postnuptial agreement. Lay everything out in detail so they cannot contest them during the divorce proceedings.
The Handling of Debt
After getting married, new couples may take out loans to buy a new home or start a new business. Both parties may have also accumulated credit card debt throughout the marriage.
The two sides need to agree on how to handle those debts following the divorce. They need to agree on who will be responsible for which loan or how the payments will work if both will share the responsibility of all the debts.
The Transfer of Assets if One Party Dies
It’s not the most pleasant topic to talk about, but it is one worth broaching. Unexpected deaths happen all the time, and it’s important to acknowledge that in your postnuptial agreement.
Indicate how you wish to handle certain assets if you die unexpectedly during the marriage. Your spouse should do the same thing. Including those details in a postnuptial agreement will make a potentially difficult time a bit easier to manage.
The Terms of Spousal Support
Spousal support is a topic that gets a lot of attention during divorce proceedings. One side may want the other party to pay X amount while the other is saying that the amount requested is too high.
Those discussions can break down and become acrimonious in a hurry. Prevent things from heading in a bad direction by indicating how to handle spousal support in the postnuptial agreement you and your spouse sign.
Can the Terms of Custody and Child Support Be Included in the Postnuptial Agreement?
Given that custody and child support are also often talked about during the process of divorce, one might assume that those topics can also be addressed in a postnuptial agreement. In many cases, though, it may not enforce the terms of custody and child support.
Established laws and the courts themselves are always looking out for the best interests of the children involved in the marriage. The courts will evaluate the situation first before deciding regarding custody and child support. Regardless of how you and your spouse laid things out in the agreement, the courts can still get involved on behalf of the children.
How Can Both Sides Ensure That a Postnuptial Agreement Is Valid?
After you and your spouse come to a mutual agreement that drafting a postnuptial agreement would be best, the two of you now need to cooperate to ensure that it will hold up in a court of law. Keeping a few things in mind when crafting and finalizing the agreement will be crucial to ensuring its validity.
How the Two Parties Are Involved
The two of you are signing a postnuptial agreement. The key word there is “agreement,” meaning the two sides must be amenable to the provisions of the agreement.
If the court finds that one party was not given ample time to review the agreement or was forced to affix their signature while being threatened in some way, the agreement may wind up invalidated. It’s important that both sides truly collaborate on putting the agreement together because the court may ignore it otherwise.
The Postnuptial Agreement Is Not in Writing
When it comes to legal matters, it’s always important to get things in writing. Placing that document in front of the judge to examine increases the chances they will honor it during the divorce. Don’t forget about this when you’re working on the postnuptial agreement together with your spouse.
The Postnuptial Agreement Lacks Accurate Details
Postnuptial agreements that contain inaccurate information will not hold up in court. Before deciding if you want the agreement honored, make sure that it contains only accurate information.
You should also check to see if it mentions all the pertinent facts, so they are accounted for in the division of assets. To ensure fairness, both parties need to mention everything.
The Postnuptial Agreement Contains Invalid or Unreasonable Provisions
We have a lot to discuss here, so this is going to be a longer entry than the previous ones. When crafting the postnuptial agreement, you and your spouse need to outline provisions that are valid and reasonable.
First, the postnuptial agreement must be cognizant of the laws in the area. Unbeknown to you and your spouse, the agreement you created may be disregarding state laws. Once that happens, there’s no chance the court will acknowledge it.
As for the unreasonable provisions, they often come into play when discussing matters related to money. From a financial perspective, the agreement may be favoring one side over the other, and the court will not allow that.
When deciding how to divide your finances, make sure that both sides get a fair share. That will increase the chances of the court accepting the agreement. It’s the same thing with your other assets, so take the time to divide those fairly.
When Should You Consider Creating a Postnuptial Agreement?
Because prenuptial and postnuptial agreements are not commonly accepted elements of marriage at this point in time, bringing up the topic of signing one to your spouse can be a tricky proposition. Despite that, though, there are still reasons for you to consider drafting a postnuptial agreement.
Let’s talk about what those reasons are below.
You Want to Ensure Your Children Receive a Fair Share of Your Assets
In some cases, when two people get married, it’s almost like two previously separate families becoming one. You may have children from an earlier marriage, and the same may be the case for your spouse.
It’s not unreasonable for both of you to watch out for your children first. To do so, you may create a postnuptial agreement. Clearly indicate how you want your assets distributed so that your spouse and your children receive a fair amount.
You Want to Protect Your Assets
If you and your spouse already had significant assets before getting married, both of you may be interested in keeping them separate. You may want to keep any business ventures that you started on your own to yourself, and the same could hold true for your spouse.
In a situation such as that, the postnuptial agreement could prevent the divorce from getting any messier than it needs to be. The two of you can retain the assets you originally had prior to the marriage, and disputes won’t be necessary.
You Suddenly Received a Large Inheritance
You should also consider creating a postnuptial agreement if you recently received a large inheritance. That money was left to you by a loved one. You should spend it as you see fit.
Without a postnuptial agreement, though, they will treat the inheritance as another one of your joint assets. They may also divide it equally if you and your spouse end up divorcing. If you want to prevent that from happening, you must indicate that you received an inheritance in the postnuptial agreement.
You Did Not Want to Deal With Creating a Prenuptial Agreement
Planning a marriage can be a stressful and chaotic undertaking. You have so many things to worry about, including the venue, the catering, the guests, and that still doesn’t account for everything.
During all that, trying to draw up a prenuptial agreement can prove impossible to pull off.
Not everyone is open to the idea of signing up for a prenuptial agreement. Your spouse may mistakenly see it as a sign that you don’t have a lot of confidence in your marriage, and you don’t want that.
You Want to Secure Your Assets while Giving Your Marriage Another Try
According to Investopedia, there are cases where some couples will sign a postnuptial ahead of one more reconciliation attempt. The two parties are still trying to save their marriage, but they also both acknowledge that divorce is a real possibility.
At that point, you don’t have much to lose from signing a postnuptial agreement. Even if the reconciliation attempt does not work out, the agreement can still prove beneficial as it helps speed up the divorce proceedings.
You need to be detailed and cautious when putting together a postnuptial agreement. If you’re unsure about how to approach creating that kind of document, then please feel free to contact us at the Schill Law Group. Reach out to us today to ensure that the postnuptial agreement you enter is fair to both you and your spouse.