Understanding Postnuptial Agreements
While many couples think about prenuptial agreements after walking down the aisle, a postnuptial agreement occurs after a couple gets married. Postnuptial agreements can be reached when couples want to protect assets and income and divide them up in the event of a divorce or death.
Standards for Creating a Postnuptial Agreement
When forming a post-marital agreement, there are certain rules that need to be followed to keep the agreement from being nullified in court.
- Complete and fair disclosure. Everything touching on finances, income, and other things mentioned in the agreement need to be put out in the open.
- The other important condition of postnuptial agreements is that both parties should have independent legal representation. This means you must hire separate lawyers and that each lawyer should attach a certificate of independent legal representation to the agreement.
- A postnuptial agreement should also be signed intentionally and voluntarily. Any indication that one partner threatened or coerced the other into signing the agreement automatically nullifies it. Oral postnuptial contracts are considered invalid. Postnuptial contracts have to be in writing.
- A postnuptial agreement needs to be unconscionable. A contract that is one-sided or unjust towards one of the parties is not enforceable.
- In most cases, to make a postnuptial contract valid, the signatures of both parties have to be notarized. Some state laws require that the parties’ signatures be witnessed.
The Contents of a Postnuptial Agreement
The following are some of the issues featured in a postnuptial agreement:
- All debts and assets of your relationship together with any past or anticipated debts that could potentially ruin your marriage
- The family’s spending habits. Oftentimes in a marriage, you will find that one spouse is the sole bread winner while the other cares for the children. This is one reason the stay-at-home spouse may want to secure their financial future by entering into a postnuptial agreement
- How you expect to divide property after a divorce. The main motivation for a post-nuptial agreement is to divide property in case of a divorce instead of having the state dictate the way marriage property will be divided
- How you expect to divide property after one of you dies. This is important especially for people who are in their second or third marriage or a family where the children are from different spouses. If a will is in place, the post-marital agreement will simply uphold the terms and conditions of the will.
When to Avoid a Postnuptial Agreement
Postnuptial agreements are not for every spouse. A low earning spouse may receive less alimony and property in a postnuptial contract than if the case was to go to trial. A wealthy spouse who wants to avoid alimony, or who does not want to divide the family business, may use a postnuptial agreement to protect their assets and income in future.
How A Lawyer Can Help In Postnuptial Agreements
Legal Counsel: As stated earlier, postnuptial agreements are not for every couple. While there may be legal mechanisms of avoiding exploitation in postnuptial contracts, in some cases, it is either wrong or wise to enter into such agreements. Your lawyer will advice you on the implications of getting into a postnuptial agreement.
Protecting Your Interests: One of the basic rules of postnuptial agreements is fairness. Your lawyer will ensure that the agreement is in your best interest.
Enforcing Postnuptial Agreements: Postnuptial contracts are made to be enforced in the event of the death of one spouse or after a divorce. Your lawyer will ensure that all the terms and conditions of the prenuptial contract are met.
A post nuptial agreement is based on the same principle as a prenuptial agreement. The difference between the two is that a prenuptial contract is entered into before marriage while a post nuptial contract is entered into after a couple is married. In a post nuptial agreement, partners will disclose to each other the property and money they own in an effort to distinguish marital and separate property. This agreement may also sets forth the responsibilities and rights that partners have during the marriage including how money and assets will be distributed in the event of a divorce or the death of one of one partner.
Are Post-Nuptial Agreements Enforceable
While many states recognize postnuptial agreements, some jurisdictions have explicit laws that cover postnuptial agreements while others subject postnuptial agreements to the rules of contract laws. Where there is no applicable law, case law will be used to determine whether a postnuptial agreement is valid.
To increase the possibility of enforceability:
•Each spouse should have their own lawyer
•Each spouse should honestly and fully disclose their income and property
•The contract should not involve issues of child custody or child visitation
•The agreement should be in writing
•The agreement should be entered into voluntarily- no party should feel pressured into entering into the agreement
Why Would You Need a Post-Nuptial Agreement?
As indicated earlier, the reason couples get into a postnuptial agreement is to decide on how to divide income and property in case of a tragic event. Some of the other reasons a couple may need a post nuptial agreement include:
•When one of the spouses is jobless and completely dependent on the other for income. One spouse may opt to stay at home and raise the children. In such a scenario, a postnuptial will make sure the stay at home spouse is catered for in case the marriage ends.
•When in-laws want to pass assets or property to their children. With postnuptial agreements, inheritance agreements can be structured in a manner that acknowledges the wishes of the deceased.
•To cater for arguments over money. One of the main reasons for a postnuptial agreement is to cater for money disputes between spouses. The agreement ensures that both spouses are treated fairly in the event of a divorce.
Under What Circumstances Can a Post-Nuptial Agreement Be Terminated?
Some of the grounds for terminating a postnuptial agreement include:
•Duress- Both parties are required to voluntarily agree to the contract. If one of the spouses is forced to enter into the contract, the agreement is invalid.
•Bias- The agreement needs to be consciousable. This means that the contract needs to be seen as fair to both partners.
•Non-complete Disclosure- Both parties need to fully disclose their assets. Failure to disclose the assets automatically ruins the legality of the contract
•Written Contract- Many states do not recognize postnuptial agreements based on a gentleman’s agreement. Postnuptial agreements that are not in writing are in most cases considered null and void.
How A Lawyer Can Help In a Post Nuptial Agreement
When getting into post-nuptial agreements, it is advisable to hire a lawyer. The first duty of your lawyer is to advice you regarding your rights and the implications of getting into a post-nuptial agreement. A high net worth spouse is likely to be advised against being involved in a post nuptial agreement. In case your lawyer advices you to enter into a post nuptial contract, they are supposed to ensure that all the elements of an enforceable contract are observed. Finally, in case of a divorce or the death of your spouse, your lawyer will take the necessary steps to ensure that all the terms and conditions of the post nuptial agreement are fulfilled.