What is a postnuptial agreement?
We’re probably more familiar with the term “prenuptial agreements” as we hear again and again the details of a failing celebrity marriage and all the gory details laid out in contracts that they sign well before walking down the aisle. What we probably don’t hear about as frequently are postnuptial agreements. So, what are they and what’s the difference? The term is pretty self-explanatory. While a prenuptial agreement is a contract entered into prior to marriage that dictates how the assets that each spouse brings into the marriage (and often assets accumulated during the marriage) would be divided in the event of a divorce, a postnuptial agreement is a contract of similar substance, but it’s one that is drawn up and signed by both spouses after they’ve said “I do”. A postnuptial agreement can come in the days, weeks, years; sometimes even decades after vows are exchanged. And according to a recent survey by the American Academy of Matrimonial Lawyers, 50% of divorce attorneys report an increase in spouses seeking a postnuptial agreement during the last three years.
Why a postnuptial at all?
With the surrounding negative connotation of a prenuptial agreement- essentially an agreement laying out the terms of your divorce before you and your spouse even get a start at your marriage- the thought of entering into a similar such agreement during your marriage may seem…awkward. Or uncomfortable. Or weird. Or unromantic. So, why do it at all? If they feel like they could do more harm than good, why are divorce attorneys seeing so many of them lately? As with anything in life, it’s complicated. But the benefits to having either agreement can far outweigh any perceived awkwardness or tension having one drawn up may cause. One of the leading reasons divorce attorneys find their clients drawing up postnuptial agreements is because they are in either a struggling or failing marriage and have one essential, common goal: to punish a spouse for unsavory behavior (think infidelity). In other circumstances, one spouse might use the postnup to recommit to a struggling marriage, with the postnup guaranteeing a more lucrative settlement should things end in divorce.
But the reasons aren’t all bad. If you consider that some marriages can span decades, things like health and wealth can fluctuate drastically in a period of time that long. Postnups can be a powerful estate planning tool for older spouses wishing to provide security to a spouse following a death. Many couples feel prenups are unromantic or pessimistic as they turn an impending marriage into a business transaction or force the couple to think of worse-case scenarios. But after a few years (or more) of marriage, many couples turn to postnups after realizing that guaranteeing financial security to a spouse in the event of a death is neither unromantic nor pessimistic. It’s smart. A postnuptial agreement can be used to outline the following:
- The extent to which one or both spouses is the recipient of income from any source
- Who is responsible for settling debts
- Spousal waiver of benefits from retirement accounts
- Details of the division/distribution of property in the event of divorce or death
A couple may enter into a postnup as a means to update an existing prenup, handle any changes in finances, or because their goals and priorities have shifted since the start of the marriage. Issues surrounding child care, household responsibilities and financial decisions are often included in a postnuptial agreement either in response to or in anticipation of conflicts or changes in these areas.
Oftentimes, an older generation wants their heirs to draft and sign postnuptial agreements in an effort to ensure that their wealth remains in the direct bloodline of the family and isn’t at risk in the event of a divorce. For example, say Dad is super rich. His son marries a woman with two children from a previous marriage and they go on to have two children of their own. As a requirement for inheriting a portion of his wealth, Dad can ask his son and wife to enter into a postnuptial agreement that specifies only the biological grandchildren are eligible to inherit his money, not the step-grandchildren.
While the reasons to get a postnup can vary from one end of the spectrum clear to the other end, many attorneys agree that more often than not, a postnup can revitalize a marriage or create a more harmonious union.
Can I DIY a Postnuptial Agreement?
Short answer: no.
Postnuptial agreements often face greater scrutiny in a courtroom and require that both of the following circumstances be met in order for it to be valid:
- Both spouses must fully disclose financial details (incomes, assets and liabilities) in the document.
- Each spouse must be individually represented by separate and reputable attorneys prior to signing the agreement.
Both of these conditions ensure fairness and full disclosure from both parties. Additionally, the agreement must be signed by both parties and notarized before it is official.
If you find yourself in need of help drafting either a prenuptial or postnuptial agreement, or in need of representation, please consider giving Ferrante and Dill, LLC a call today. Our partner and Family Law attorney, Jennifer Dill, is one of the top rated Divorce and Family Law attorneys in Maryland. Give her a call today at (410) 535-6100 or send her an email at email@example.com.