A postnuptial or “postnup” agreement is similar to a prenuptial agreementbut this legal contract is written and signed after the legal marriage of the couple.
A postnup contract describes how the assets will be divided. It may also contain many other provisions dictating marital conduct – from the distribution of household chores to expectations of monogamy to the permitted number of visits from the mother-in-law.
Key points to remember
- A postnuptial agreement is written after a couple is legally married.
There are various reasons for a post-up contract, but a common reason is to provide financial security in the event of a divorce.
- A postnuptial agreement is usually about financial assets, but it can contain anything from how often the in-laws can visit or how the couple will share household chores.
- You may need or want a postnuptial agreement if you have children from previous marriages or own a business.
- Not all states recognize a post-nuptial contract, so it’s wise to consult an attorney regarding martial contracts and divorce laws.
You need a post-nup when…
Postnuptial agreements have become common in recent years, and they are honored and enforceable in most US states. Most postnups are primarily about money and asset protection in the event of a divorce, and postnups can be written when a couple is in crisis or concerned about the state of their union. If you’re wondering whether or not you and your spouse need a postnuptial agreement, you might want to consider the following potential areas of concern.
1. One (or both) of you are rich
Divorce Lawyers agree that postnups are essential for spouses who enter marriage with large prenuptial assets or who expect to inherit large future assets. In these situations, a postnuptial agreement can help ensure that each spouse leaves the union “whole,” along with the assets they brought to the divorce.
2. You have children from a previous marriage
In cases of blended families, postnups can predetermine the share of assets your spouse will receive in the event of divorce or death, thus guaranteeing your offspring the inheritance you want them to pocket. In most cases, without a signed postnuptial agreement outlining these details, states automatically grant current spouses a share of your estate upon your death.
Some state laws also dictate the division of joint assets in the event of a divorce. Before signing a postnup, check with your attorney about the laws of the state you live in or, if you’re moving, your future home state.
3. You or your spouse own a business
A postnup can also protect any income or assets you earn during the wedding. This is crucial for spouses who own their own business. Without a postnup, an ex-spouse may be entitled to a percentage of the business or its earnings.
4. You hated the idea of a prenup, but now you want one
Some people think that negotiating prenuptial agreements is a wasteful and stressful exercise, where the mere thought of divorce can doom a marriage from the start. Many couples opt for postnups simply because they don’t want awkward discussions about asset distribution before their big happy day. Therefore, these negotiations might flow more smoothly once the newlyweds settle into their marital routine.
5. You recently received a significant inheritance
If either of you unexpectedly receives a large bequest or gift from a family member, you may want to consider a postnup. Under normal circumstances, new assets become common assets; therefore, a postnup can help keep said assets reserved only for you in the event of a marital separation.
In some marital situations, a postnup is strongly recommended for spouses who have not signed a marriage contract. Postnups are especially beneficial when one or both partners have significant premarital assets or children from previous marriages. Along with failed marriages, postnups can eliminate costly and acrimonious divorce battles. If a marriage is successful until death, a postnup can prevent inheritance disputes between a person’s surviving spouse and their heirs.
With contractually defined conditions in place, you and your spouse know who gets what, with little room to argue. Working with a trusted attorney can help the process of creation of a postnup contract (relatively) painless.