Postnuptial Agreements — What You Need to Know
A postnuptial agreement is a legal document that explains and designates how property will be divided in the event of a divorce. It is very similar to a premarital (or pre-nuptial) agreement, except a premarital agreement is signed prior to the marriage and a postnuptial agreement is signed after the marriage has already occurred.
While a post-nuptial agreement is enforceable if properly executed, there is often a “dark cloud” over post-nuptial agreements. whereas they are more easily overturned than a premarital agreement, especially if there are assets that have been comingled already during the marriage or received during the marriage. Any income earned during a couple’s marriage and any property or money accumulated during a marriage is presumed to be marital property unless otherwise allocated (such as in a premarital agreement). Once the money or property is considered marital in nature, someone agreeing to waive their right to something that is legally marital is a more difficult argument to make, than say, property that the spouse had prior to the marriage occurring. In the latter scenario, the property or money was always non-marital and the agreement keeps it non-marital.
In a postnuptial agreement, some parties take marital property and try to label it as non-marital property. The fact that a postnuptial agreement may be more difficult to enforce than a premarital agreement does not necessarily mean that they are bad or unenforceable, it simply means that extra care has to be taken to ensure they are extremely clear, as well as drafted and executed meticulously to ensure that every precaution has been taken to make them enforceable.
Common Scenarios for Postnuptial Agreements
Some scenarios where a postnuptial agreement is common or necessary are as follows:
- Parties who wanted a premarital agreement but ran out of time or put it off prior to their wedding;
- Parties who are entering into a second, third, or fourth marriage (and so on); (especially when they have minor children from a previous marriage)
- Parties who have minor children from a prior relationship;
- Parties who own a business;
- Parties who come into a large inheritance or non-marital gift from family and want to ensure it is protected;
- Parties who wish to stay in their marriage, but only will do so if they are certain that in the event they divorce, they will be aware of what is “theirs”. (More on this public policy argument below).
Save Your Marriage with a Postnuptial Agreement?
Postnuptial agreements have to be for the purpose of saving or preserving the marriage, which may be contrary to why people believe they are needed. The purpose of a post-nuptial agreement is not to contemplate a divorce. In fact, the public policy argument behind why post-nuptial agreements exist is for the purpose of trying to save marriages.
For example, if someone is in a marriage and they are not happy and are thinking divorce is a possibility, they may be more inclined to try and get out of the marriage quickly. This might be because the longer they are married, the larger a spousal support obligation they’d have to their current spouse. Or, the longer they are married, the larger a share of the property could be awarded to a subsequent spouse.
Some of the laws that govern parties in a divorce case, especially when there is a disproportionate share of earned income, can be looked at as “favoring” the lesser-earning spouse. However, if the parties can agree to a postnuptial agreement, whereas they determine exactly what would be paid out in the event of a divorce, it gives both parties reasonable reassurance of what would happen in the event they choose to pursue one. This takes the “unknown” out of the equation, and the thought is that people would be less likely to file for divorce and to work to save their marriage if they are no longer concerned about what the financial picture and financial security would look like in the event of a divorce.
Post-nuptial agreements are arguably designed to save marriages, not to contemplate divorce, nor to break up marriages. When looking at them through this lens, it actually can be a very useful tool in trying to salvage a marriage and avoid divorce.
THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/post-nuptial-agreement/postnuptial-agreements-what-you-need-to-know/