A postnuptial agreement may protect your assets
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A postnuptial agreement may protect your assets

On Behalf of | Oct 11, 2022 | Firm News

No one plans to get divorced, but many engaged couples enter a prenuptial agreement to set forth the division of property if this occurs. Married couples can also enter similar agreements, especially if their financial situation changes.

Postnuptial agreement

Couples may enter a postnuptial agreement to protect their property if they ever divorce. These agreements may be especially beneficial in a high-asset divorce and address how property is divided, support obligations, paying debts, inheritances and other divorce matters. Postnuptial agreements may also help assure that children from earlier relationships may receive an inheritance if their parent dies.

A postnuptial agreement is a contract similar to a prenuptial agreement entered before marriage, which generally addresses the couple’s situation during their engagement. Couples can replace outdated prenuptial agreements with a postnuptial agreement.

Courts, however, review postnuptial agreements more closely than prenups. They may invalidate agreements if they find that there were unbalanced negotiating positions because a spouse who is already married had a diminished ability to protect their interests.

Advantages and disadvantages

Couples should consider a postnuptial agreement if they believe it will financially protect them. There are also other advantages and disadvantages.

Advantages include:

  • Couples can have a candid conversation about their finances and engage in planning.
  • Negotiating an agreement requires disclosure of each spouse’s financial condition.
  • Married couples are often more mature and have more experience and knowledge about financial matters and have set specific goals.
  • Prenuptial agreements are oriented to the future while postnuptial agreements address the present, growth of income and assets and events such as starting new businesses, inheritances, and investment growth.
  • Spouses with children from earlier relationships can protect their interests in family heirlooms that were bought or inherited.

Disadvantages typically involve:

  • Some spouses may feel that discussions about a postnuptial agreement indicates weakness in their relationship and may be uncomfortable with discussing the possibility of divorce.
  • Disagreements about postnuptial agreement terms can cause hurt feelings or marital discord so it may be helpful to use a therapist to help discussions.
  • One spouse may feel coerced or feel forced to agree to unreasonable requests if the other spouse earns more money or has another unequal bargaining position.
  • Judges closely scrutinize postnuptial agreements and may revise or strike out terms that they find unfair.

Attorneys can help provide options to address these and other issues. They can assist them with protecting their rights and drafting a fair and enforceable agreement.