Is a Postnuptial Agreement a Good Idea?

A postnuptial agreement is signed after a couple is married. It defines what happens to a couple’s assets after a divorce. There are lots of benefits to having a postnup — but is it the right solution for you and your spouse? Let’s find out.

According to family lawyers, more and more couples consider a postnuptial agreement at some point during their marriage. Just like a prenuptial agreement, a postnuptial contract offers financial and emotional security if a marriage doesn’t work out.

Why Would Anyone Get a Postnup?

A postnuptial agreement, aka postnup, is similar to a prenuptial agreement. It is a written contract between you and your spouse that controls what happens to your financial assets after a divorce. The main difference is that a prenup is signed before marriage and a postnup is signed after the wedding bells ring. 

Postnuptial agreements are a relatively new legal trend but they are becoming more popular. They are also fully recognized and enforceable in most US states. Just like prenups, most postnups focus on protecting financial assets from a divorce. Spouses typically consider getting a postnuptial agreement for one of several reasons:

Clarifying an Existing Prenup

A postnuptial agreement can clarify or complete your existing prenup. If there have been changes in your or your partner’s financial situation, you may have good reasons to add clauses to your prenup agreement. Plus, as you have already been married for some time, certain issues may become more clear and easier to define than at the start of your marriage. 

Protecting a Stay-at-Home Spouse

If at some point in your marriage, one of the spouses decides to stop working and focus solely on raising a family, this can affect their financial situation. The stay-at-home partner may want to make sure this situation doesn’t threaten their financial security. In this case, a prenuptial agreement can be a way to make up for their temporary financial vulnerability.

Redefining Newly Acquired Assets

If either partner’s financial situation has changed substantially (for instance, they have received an inheritance), they may want to sign a postnup to manage what happens to their new assets going forward. New assets acquired during the marriage are generally viewed as joint assets and will be equally divided in case of a divorce. A postnup can override this and redefine what happens to such newly acquired assets.

Necessary to Protect a Small Business

If you own a business, a postnup can protect your company and its assets created during the marriage. Without a prenup or postnup, your spouse may be entitled to, or on the hook for, a percentage of your company and its earnings.

Other Reasons for Considering a Postnuptial Agreement

Timing: It may be that signing a postnup is less stressful than a prenup. Discussing financial issues may not be the most pleasant thing before your big day. However, once you are already married, discussing and negotiating finances may be less stressful. What’s more, when you are already settled into a marriage, you will have a better understanding of your finances and what protections to include in your postnup.

Other reasons for getting a postnup are similar to those for getting a prenup – if you or your spouse have substantial premarital assets, signing one can keep these assets protected in case of a divorce. 

Children’s Rights: If you have children from previous marriages, a postnup can determine how assets are shared with them and make sure those children are protected financially. Without a valid prenup or postnup agreement, your latest spouse can inherit the previous spouse’s assets upon their death and limit what is available to the children from your first marriage. 

Infidelity: Some couples may use a postnup as a way to rebuild their relationship after a conflict or incident. For instance, if one of the partners was unfaithful, the other spouse may want to use the security of a postnup as collateral so that the infidelity doesn’t happen again. These agreements help avoid disputes in case of a divorce, and bring down the costs of legal fees associated with divorce proceedings.

Note that just like a prenup, a postnup can include a sunset clause. A sunset clause is a provision that sets a time limit for the duration of the postnup. For instance, you can include a clause in your agreement that sets the duration for the postnup to last five years. If the couple gets divorced after the agreement expires, the postup will no longer apply.

What are the Cons of Signing a Postnup?

Signing a postnup comes with several potential complications. 

A postnup will inevitably lead couples to question their relationship to som edegree. Preparing for a divorce may feel like separation is inevitable and sow a seed of distrust in the marriage. If one spouse wants to sign a prenup before the marriage, it may make the other spouse question their intentions.

If a couple is going through a tough period in their marriage and the relationship is already tense, the decision to sign a postnup may add further strain on the marriage. Moreover, negotiating financial matters when you are not on the best terms with your spouse may not result in the best decisionmaking.

Legal Considerations for Postnuptial Agreements

Note that if you decide to create a postnup, it must be drafted according to existing state laws. If a postnuptial contract includes a prohibited clause, it can be deemed invalid. Any sign that one of the parties has been coerced into signing the agreement will also make it void. Moreover, if the agreement strongly favors one party and disregards the interests of the other partner, it can be contested in court and be ruled unenforceable. 

When signing a postnuptial agreement, each party must have legal representation. The job of a lawyer is to make sure each spouse understands the consequences of signing the agreement. They also need to check that the agreement is balanced, considerate of both spouses’ interests, and doesn’t break any laws.

To make sure there is no conflict of interest, each party needs to hire legal representation. Most lawyers charge a package fee for a set of legal services associated with drafting a prenup. This typically results in costs between $1,500 and $5,000 per spouse.

In contrast, Unbundled Legal Help works with attorneys who also offer affordable options. Unbundled attorneys work on a pay-as-you-go basis, only charging you for services you use, like help with specific parts of a postnup.