A South Dakota postnuptial agreement is a document married couples use to decide their asset division if their marriage ends due to divorce or one spouse’s death. This contract helps couples decide on circumstances that work for them, as it supersedes the state’s default rules. Dissimilar to a prenup, the parties sign a postnup after they get married.
Understanding Postnups in South Dakota
Subject to Scrutiny and Validity Requirements
According to Smid v. Smid 756 N.W.2d. 1, a postnup is subject to scrutiny because of the confidential nature of a husband and wife’s relationship. Furthermore, this case emphasizes that a court of law will uphold a postnup in cases of death or divorce if all the following statements are true:
- Both parties freely entered the agreement.
- Both parties adequately disclosed their assets.
- The agreement involved adequate consideration, meaning both parties received something of value in exchange for entering the agreement.
Asset and Property Rights
Wife’s Separate Property
- Any personal or real property a woman acquires before marriage, and any property she may acquire after marriage, shall be her separate property. She also will not be liable for her husband’s debts. [1]
Capacity to Contract
- A married woman can execute any power, such as entering a contract, even if her husband is not doing so as well. This situation applies as long as the power does not prescribe other terms. [2]
Business and Earnings
- The wife or husband can make agreements or deals with each other or other people regarding property, just like they could if they were single. [3]
- All agreements must abide by the same rules that apply to people in confidential relationships. [3]
Marriage and Divorce
Separation Agreement
- A wife and husband cannot alter their legal relations, except as to property or during the separation period, via a contract. [4]
- They may agree in writing to a swift separation and make modifications to support either of them and their children during the separation. [4]
- For such a separation agreement, the parties’ mutual consent is adequate consideration. [4]
Spousal Support
- A spouse can request separate maintenance based on grounds for divorce, even if they don’t actually seek a divorce. The court may grant temporary financial support or permanent support to ensure the spouse and children have enough resources during the separation period. [5]
- Any alimony decision can be reviewed and updated if necessary through the appellate process. [6]
Marriage Solemnized Out of State
- Any marriage contracted outside the state is valid. [7]
Estate Planning and Inheritance
Nonprobate Transfers on Death
- A provision for a non-probate transfer on death in a postnup is nontestamentary (meaning it doesn’t have to go through probate). This subsection includes a provision that:
- Money owned by, controlled by, or due to a decedent before their death must be paid after the decedent’s death to someone the decedent designated in the document or a separate writing.
- Money due or to become due under the postnup ceases to be payable if the promisee or promisor dies before demand or payment.
- Property owned or controlled by the decedent before death, which is the subject of the postnup, passes to a decedent’s beneficiary either in the postnup or in separate writing. [8]
- These rules don’t change the rights that creditors (people or organizations owed money) have under other laws. Creditors still have the right to collect debts owed to them from the deceased person’s estate. [8]
Inheritance Rights
- The intestate share of a decedent’s surviving spouse is the entire intestate estate if the decedent doesn’t have any surviving descendants or if all of the decedent’s surviving descendants are also the surviving spouse’s descendants. [9]
- The intestate share of a decedent’s surviving spouse is the first $100,000 plus half of any balance of the intestate estate if at least one of the decedent’s surviving descendants isn’t one of the surviving spouse’s descendants. [9]
