A postnuptial agreement (or “postnup”) is a legal contract created after a couple gets married that outlines each partner’s financial rights and responsibilities in case the marriage ends in divorce, annulment, separation, or death. Aside from its timing, this contract is similar to a prenup.
To be valid, both partners must have enough time to consider the agreement and sign it voluntarily. Without a postnuptial agreement, your state’s default laws on divorce or inheritance will apply to you and your partner.
How to Make Your Postnup Valid
It’s essential to check the laws of your state because each state may have specific requirements for postnuptial agreements. Here are the most common considerations:
- It needs to be in writing, as oral contracts are difficult to enforce.
- It needs to be signed and notarized.
- It needs to be fair and reasonable, offering protection to both parties.
- Both spouses have to fully disclose their assets, as hidden assets may nullify the agreement.
- Both parties need to agree to all the terms in the postnup.
Prenup vs. Postnup
Both agreements address the division of assets after marital separation, but postnuptial agreements are drawn up after the marriage instead of a contract agreed upon beforehand.
A couple may consider getting a prenup if one partner brings more assets or debt into the marriage than the other. A couple may consider getting a postnup if they didn’t consider it before they got married and now deem it a good idea.
Postnup vs. Separation Agreement
A separation agreement is a document with the same general functions as a postnuptial agreement but with a different intent. Spouses use separation agreements when they want to live apart but remain legally married for specific healthcare or tax benefits. They may have the intention of having a divorce later on.
Postnuptial agreements are not meant to prepare for an inevitable divorce. Instead, they act as a safety precaution if the marriage becomes strained.
When Should I Use a Postnuptial Agreement?
A prenuptial agreement may not seem ideal until after marriage when it is no longer possible to create. Changes in a married couple’s financial situation, such as one person receiving an inheritance or taking on debt, may necessitate using a postnuptial agreement to protect one or both spouses.
A postnup may also simplify the legal process of getting a divorce by dividing the assets beforehand, assuming that both spouses can agree without needing separate divorce attorneys.
Certain niche cases, such as inheritance for children from another marriage or income generated from a business solely owned by one spouse, are also conditions to consider and protect if a marriage ends. These things may not be apparent until well into the marriage.
