A postnuptial agreement is a legal contract that married couples can enter into at any point in their marriage. Just like a prenup, a postnup outlines each spouse's rights and obligations regarding their financial matters and other personal affairs in the event of a divorce.
The biggest benefit of a postnuptial agreement is the prevention of possible catastrophes. In this article, we look at several common scenarios and what could potentially happen without a postnuptial agreement in place. Bear in mind that every relationship is different, so the following examples may not directly apply to your situation.
One spouse inherits a large sum of money
With a postnuptial agreement
Let’s say one spouse inherits a large sum of money. They draft a postnup agreement stating that the inheritance is non-marital property that would be retained by the heir in a divorce settlement. If a divorce occurs, the inheritance goes directly to the heir and does not have to be shared.
Without a postnuptial agreement
With no postnuptial agreement in place, the inherited money would likely be considered community property and subject to property division. In a worst-case scenario, the inheritance could end up going completely to the other spouse, even if it was originally intended for only one person.
One spouse starts their own business
With a postnuptial agreement
Let’s say one spouse starts a business. Together, the couple drafts a postnup specifying where business-related assets would go in the event of a divorce. Down the road, they do get divorced – but because of the postnup, the divorce moves at a normal pace with no questions or fights about property division.
Without a postnuptial agreement
With no postnuptial agreement in place, the business would probably be considered community property and subject to division. In a worst-case scenario, this could mean the business ends up going completely to the spouse who is not the business owner.
The couple has children together
With a postnuptial agreement
When a couple has minor children, divorce can get complicated. But if the couple has already drafted an agreed-upon parenting plan, child custody and child support decisions are much easier and less contentious.
Without a postnuptial agreement
With no direction from a postnup, custody of the children could potentially be decided by a court if the couple were to get divorced. This could mean that the children end up living primarily with the other spouse, even if that wasn't what either parent wanted.
Do you have pets? A postnup can help you decide who gets Fido and Fluffy in the event of a divorce. Click here to read more about pet custody in divorce.
5 tips for couples considering a postnuptial agreement
1. Talk about your finances early and often
Couples often don't discuss postnuptial agreements because they prefer to avoid talking about money and their financial situation. But money is one of the most important aspects of a marriage, so it's important to be on the same page from the start. Schedule regular money dates to discuss your financial goals and plans. This will make it easier to broach the subject of a postnuptial agreement.
2. Communicate openly with your spouse
One of the main reasons couples get postnuptial agreements is to avoid fighting about money and the division of assets. If you're considering a postnup, discuss your reasons for wanting one openly and honestly. Address your concerns, and explain how having a postnup could benefit both of you financially in the long run.
3. Be honest about your expectations
There’s no arguing that the divorce rate is high. If you are married and did not create a prenuptial agreement prior to your wedding, you will be vulnerable if or when your marriage ends. Discuss your fears and concerns openly and honestly. This way, you'll be able to address them head-on.
4. Educate yourself on the benefits of a postnup
One of the best ways to overcome the stigma of having a postnuptial agreement is to learn the benefits of these contracts. A postnuptial agreement can protect both parties in the event of a divorce, saving time, money, and stress down the road. In some cases, it can even help strengthen a marriage by giving each spouse a greater sense of security.
5. Don't let anyone pressure you
Your decision to get a postnup should be based on what's best for you and your spouse, not what anyone else thinks. It's a marital agreement, not a group effort involving family and friends. If anyone tries to pressure you into getting one or not getting one, take their opinions with a grain of salt. In the end, it's your life and marriage, not theirs.
At Hello Divorce, we thoroughly understand the benefits of postnuptial agreements. We also understand how important it is for married couples to create a contract they’re both comfortable with. If you decide to take financial matters into your own hands with a postnup, we can help you create an agreement tailored specifically to the wants and needs of you and your spouse. Click here to learn more about our affordable flat-rate postnup package.
Want to read more about the benefits of a postnuptial agreement? Read Why the Happily Married Couple Should Create a Postnuptial Agreement.
