Almost everyone has heard of prenuptial agreements, but if you substitute the word "pre" for the word "post" you get an entirely different, and most likely unfamiliar, legal action. Just like the prenuptial agreement, a postnuptial agreement (also known as post-marital agreement) focuses on mostly financial issues relating to marriage, divorce and the death of a spouse. Read on for a better understanding of this type of agreement.
What is the Purpose of a Postnuptial Agreement?
While a prenuptial agreement can cover a host of financial provisions prior to the marriage, a postnuptial agreement is meant to cover things that were left out of the agreement or that arose later during the marriage. For example, any of the below circumstances could prompt the need for such an agreement:
- An inheritance: When it comes to estate planning, this type of agreement could help ensure that any inheritance would benefit only an adult child, instead of that adult child's spouse. Furthermore, this type of agreement might be used to clarify any questionable issues with a will or a trust.
- Business partnerships: This type of agreement could be part of an agreement with any business partners that stipulates that the business would not suffer any change in ownership or losses due to a divorce property settlement.
- Securing finances for a stay-at-home spouse: The agreement may help ensure that a spouse that gives up career and educational opportunities to care for the children of the marriage does not suffer financially in the event of a divorce.
- Money arguments: Having your financial issues agreed upon can help remove one of the most contentious factors leading to relationship strife.
Are Postnuptial Agreements Recognized by All States?
For the most part, all states do recognize these agreements, though there are some minor variations from state to state. In general, the states will either use family law or contract law rules to help govern these types of agreements. To help ensure that a postnuptial agreement will be enforceable:
- Both spouses should retain separate legal counsel.
- Both spouses must be open and honestly disclose all property holdings, income, and debt obligations.
- The agreement should be in writing and signed by both parties
- The agreement should avoid including any provisions related to minor children, such as child custody, visitation or child support.
This type of agreement can be useful, but can also be somewhat complicated to create. Speak with your family law firm for more information about postnuptial agreements.