Just like a prenuptial agreement, a post-nuptial agreement is created to determine how property will be divided if divorce occurs. The only difference between a prenuptial and postnuptial agreement is that the latter is created during the marriage whereas the former is done prior to marriage. With a postnuptial agreement, couples can iron out the same financial considerations they wanted to address all along—albeit after they’ve exchanged vows.
The goal of a postnuptial agreement is to decide how to share assets and debts should the parties decide at a later time to divorce. It allows couples to make these decisions without being under the pressure of an active divorce. Couples may have a variety of reasons to sign a postnup, including protecting an inheritance, providing for a stay-at-home spouse, assigning ownership of a business, repaying a parental gift, or even salvaging a marriage. Among the decisions, postnups don’t address: what the child support arrangements will be or how child custody will be assigned after a divorce.
A stay-at-home spouse whose earning power has dwindled as a result of being out of the job market—or a spouse who wants to provide for children from a previous relationship—may also see the value of a legal document dictating the partition of assets. Another very common use of the postnuptial agreement among our clients is to determine the value of a company. Assets like bank accounts and retirement funds are relatively easy to value in a divorce proceeding. But putting a dollar figure on a business in which one or both spouses are principals is considerably harder. Because valuing a company can be extremely expensive and time-consuming, some couples use postnuptial agreements as a way to categorize the business as separate property that will stay with just one spouse, and to decide the amount and how the other spouse would be compensated for the buyout should it become necessary.
Things to Consider
There are several things that will need to be considered by the couple before entering into a postnuptial agreement, and the following should be done before seeking a lawyer’s help:
- Discuss all the assets and debts of your relationship as well as future income opportunities.
- Discuss the current financial status of your relationship including spending habits, roles and responsibilities, and any concerns you have over money matters.
- Be open and honest about your assumptions and expectations of how the property would be handled in the case of death or divorce. Draw up and sign the agreement with the help of two lawyers. It is critical that you are each represented independently to maintain the contract’s legal validity.
- Revisit the contract periodically, especially if your lifestyle or financial status changes drastically. If you move to a different state, check to make sure the laws or legal precedents don’t affect the status of your contract.
Post Nuptial Agreement Lawyer can Help
At San Diego Divorce Mediation & Family Law, our attorneys can help you and your spouse come up with a postnuptial agreement that will work for your situation, and we urge you to contact our firm to speak with a postnuptial agreement lawyer to find out what can be done for both you and your spouse.