No one enters a marriage thinking it will end in divorce; however, when people hear the words “nuptial agreement,” the implication is that the couple has no faith the marriage will stand the test of time. But consider a different perspective. These agreements, whether prenuptial or postnuptial, can also be viewed as intentional steps toward restoring marital bliss, which can be especially beneficial when couples have financial concerns after marriage. Postnuptial agreements, in particular, can assist couples in making the best financial decisions for their marriage. Prenuptial vs. Postnuptial The only difference between a “prenup” and a “postnup” is the time of signing. A couple signs a prenuptial agreement before marriage, whereas they sign a postnuptial agreement afterward. Both types of agreements are contracts both spouses agree to sign to ensure a fair and decent distribution of financial assets in the event of divorce. 4 Common Reasons for Postnuptial Agreements There are many reasons a couple may want to create a postnuptial agreement. Perhaps both spouses wanted to sign a prenuptial agreement but never got around to it, or maybe the couple had a change of heart and wanted one after all. Either way, a postnuptial agreement can assist in the following scenarios. Dividing Interest in a Business: Separate or Marital Properties When dividing interest in a business, the main concern is determining marital and separate property. If the business belonged to one spouse before marriage, it is their separate property. If the business was established after marriage, it’s considered marital property. However, if both spouses contributed to the maintenance and operations of the business, Could They Be the Solution for Marital Harmony? CONSIDERATIONS OF POSTNUPTIAL AGREEMENTS
“A postnuptial agreement has an important place in many marriages and can relieve stress if you have relentless concerns about financial matters.”
it can be viewed as a hybrid property. Postnuptial agreements help couples categorize the business as a separate property to be left to the titled spouse. Determining Inheritance: To Whom Does the Money Go? If a spouse is bequeathed a large inheritance, the couple may choose to discuss the distribution of the funds in case the marriage dissolves. This is especially important if you live in a state where assets are equally dispersed between spouses if the assets were obtained during the marriage — i.e., community property. A postnuptial agreement trumps the community property law, granting the heir their full inheritance. Rebuilding a Relationship Postnuptial agreements can also function as a way to mend a strained marriage. Infidelity, for example, can be devastating to a marriage. As a condition for the marriage, the non-cheating spouse may require the cheating spouse to agree to sign a postnuptial agreement. This can signify hope for the marriage — but only under certain conditions. Protecting Stay-at-Home Parents A stay-at-home parent may have spent years out of the workforce but has equally contributed to the upkeep and harmony of the home. Because of that, the legally unemployed parent may find reentering the workforce difficult and want financial security through a postnuptial agreement. This would ensure they get a fair distribution of assets. Are you considering a postnuptial agreement? A postnuptial agreement has an important place in many marriages and can relieve stress if you have relentless concerns about financial matters. If you’re considering a postnuptial agreement, seek legal advice to navigate the complexities of these legal documents.
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