Everything You Need to Know About Postnuptial Agreements

What do you know about postnuptial agreements?

Though the conversations around pre and postnuptial agreements can sometimes be difficult to have, these agreements are designed to create a mutual understanding about how you and your spouse will share your income, assets and debts.

Romantic? Maybe not. A means of creating a clear line of communication between parties, especially when it comes to existing assets, future assets, debt, property and inheritance? Absolutely. 

Of course, the more commonly known contract of this ilk is the prenuptial agreement, which occurs before a marriage takes place. But what do you know about postnuptial agreements?

There are quite a few questions out there about them, and while we’re not able to capture answers to all of the questions, our team has taken the time to help you understand the most important and commonly asked questions we could find. 

What is a postnuptial agreement?

A postnuptial agreement is a contract between both parties in a marriage that clarifies the division of assets after the couple has already been legally wed. 

While the terms of postnuptial agreements are typically financial in nature, sometimes postnuptial agreements may even contain terms regarding individual conduct in the marriage, such as marital fidelity, division of household responsibilities, and even expectations regarding time with extended family. 

Why do couples get postnuptial agreements?

There are a number of reasons in which a couple might decide to enter into a postnuptial agreement. One of the most common situations that spur postnuptial agreements are periods of marital discord that cause one or both parties to want to clarify things relating to property and other assets. 

This does not mean that divorce is imminent. In fact, these discussions and agreements can often help strengthen a relationship by outlining what could happen should the couple divorce.

Other reasons that married couples enter into postnuptial agreements include:

• Finally getting around to it - If the parties run out of time to negotiate and sign a premarital agreement, they can incorporate the same types of agreements into a postnuptial agreement 

• Setting parameters around an inheritance —  Depending on how an inheritance is awarded, it can sometimes be considered community property, or a shared marital asset. Including provisions around how the inheritance would be distributed in the case of divorce aims to erase any confusion on the matter

• Spousal reimbursement — Sometimes, married couples will receive large sums of money as loans from extended family members for things like education expenses, down payments on a home, and other big investments. Should these couples divorce before those loans are repaid, a postnuptial agreement explains and ensures responsibility to one or both parties

• Updating an existing prenuptial agreement — There are times where couples who have entered into a marriage with a prenuptial agreement in hand and, after certain aspects of the relationship have evolved, decide that they want to update their agreement to reflect their current status as a couple

Of course, there are potentially countless reasons why a couple may choose a postnuptial agreement, and while these agreements can include a great deal of structure around a couple’s finances and assets, it can’t include everything.

What don’t postnuptial agreements include?

As is the case with prenuptial agreements, a postnuptial agreement cannot include requirements related to child custody, parenting time, child support or other parenting related matters. 

These issues are those that must be resolved throughout the divorce process, and will be decided by the court if the divorcing couple is unable to come to terms on their own accord. 

How much does a postnuptial agreement cost?

As is the case with many legal agreements, cost will vary depending on the complexity of the agreement. 

It is always recommended that both parties come to the table represented by their own attorneys to ensure that each individual’s best interests are being considered throughout the negotiation process. 

The more difficult and drawn out the negotiation process is, the more expensive the agreement will ultimately be. 

Still, despite the expenses associated with a postnuptial agreement, it is safe to assume that they will be less than what a divorce might cost. 

Are postnuptial agreements enforceable?

The fact of the matter is that while prenuptial agreements are typically recognized and enforced by the court, postnuptial agreements aren’t always held in the same light. 

If a couple divorces and the postnuptial agreement is disputed, it is possible that the court will assess the agreement and determine that the division of assets is inequitable, and will not enforce it. 

This is not always the case, but the possibility does exist. 

Though they’re not always iron-clad, it is important that these agreements clearly outline the intention of both parties should they divorce in the future. 

Interested in learning more about postnuptial agreements?

Contact DBMA Family Law today for your confidential consultation. We specialize in pre- and postnuptial agreements, cohabitation agreements, divorce, child custody, collaborative law, mediation, and much more. 

Our team is dedicated to providing you with personalized advice and representation designed to award you productive resolutions to your legal disputes. Call us today.