As many as 31% of couples will say that money issues are a source of conflict in their relationship. Monetary issues are oftentimes more intense and unsolvable than any other issues.
For many couples, combining finances doesn’t occur until after marriage. Yet, as you prepare for marriage, putting together a solid financial plan is one of the most important tasks you can do.
You and your spouse may not realize you have issues with your finances until well into your marriage. A postnuptial agreement can protect your rights if you and your spouse disagree on financial issues. It can serve as a safety net should things not work out as planned.
What Is a Postnuptial Agreement?
You’re probably well familiar with a prenuptial agreement between two people before marriage.
A postnuptial agreement is an agreement entered into by spouses after marriage. In most cases, the postnuptial agreement outlines finances between spouses should the marriage end in divorce.
Postnuptial agreements don’t have to be about finances, although they often are. A postnuptial agreement might outline how children would be handled or other obligations between the spouses during the marriage.
How Is a Prenuptial and Postnuptial Agreement Different?
A prenuptial agreement or a prenup is a contract between two people before they enter marriage. A postnuptial agreement or postnup is a contract between two married people they enter after marriage.
The critical difference between a prenup and a postnup is when it’s drafted and signed. But, while both might deal with financial issues, a postnup might be more specific since the spouse may have already entered into joint financial agreements.
Why Should You Seek a Postnuptial Agreement?
Even for the involved couple, it might seem surprising to consider a postnuptial agreement. Yet, there are many reasons why couples decide after marriage that this might be a smart idea.
They might wish to:
- Avoid conflict or ambiguity if the marriage ends
- Handle complex financial holdings
- Outline agreements about small businesses
- Reduce potential financial conflicts during their marriage
Property
A postnuptial agreement allows spouses to enter an agreement about a property they might own.
The postnuptial agreement would outline whether the property is commonly owned or separately owned. It creates an up-front understanding of the ownership of property.
It can also spell out what might become of property should the couple opt to end the marriage at any point.
Confirms an Oral Agreement
You’ve probably heard the old saying to “get it in writing.” Often spouses, before or after marriage, will agree to something orally. Unfortunately, an oral agreement is difficult to uphold if the marriage ends.
Creating and agreeing to a postnuptial agreement puts pen to paper and solidifies the oral agreements in writing. It protects both spouses since they agreed to something orally already.
Estate Planning Tool
Some couples will opt to use a postnup as an estate planning tool. The agreement can outline financial expectations should one or both of the spouses die.
It can outline how assets should distribute. This can be helpful if one or both of the spouses have children from previous relationships.
It’s important, though, that you talk with an estate planning attorney to ensure the postnuptial agreement includes everything you need as part of your estate plan.
Creates an Added Degree of Certainty
A postnup spells things out. If the marriage heads for divorce, there aren’t ambiguous questions or concerns about how assets from the marriage will be handled.
Most couples don’t like considering divorce until it’s before them. Yet, waiting until you’re facing divorce leaves many unanswered questions about what happens with assets in the marriage.
The postnuptial agreement helps spell out the finances for the couple.
Benefits of a Postnuptial Agreement
It might seem unimaginable to walk in from work and mention to your spouse you’d like to create a postnuptial agreement. Yet, there are many benefits. Let’s take a closer look.
Creates Communication
The truth is many couples really struggle with conversations about money.
A postnup allows the partners to sit down and talk through finances and negotiate how they should be handled. While it might be uncomfortable, it opens up a communication line between the spouses.
Strengthen a Marriage
It might be hard to imagine how creating a postnuptial agreement could actually strengthen a marriage. Yet, if the marriage is on shaky ground, sometimes creating the agreement gets spouses on the same page about finances.
It may create financial security for one spouse to have the finances spelled out.
Protect Spouses from a Potentially Messy Divorce
Let’s be honest; nobody likes to imagine the possibility of divorce, especially a wildly messy one.
Whether your marriage is thriving or feels shaky, the postnuptial agreement establishes the financial groundwork for your relationship. It can outline obligations for each of the spouses to meet.
Then if the marriage does turn sour, it doesn’t have to get messy or nasty. There’s already an agreement in place to avoid the extra ugliness of negotiating finances.
Get the Help You Need With a Postnuptial Agreement
While many couples will opt for a prenuptial agreement, sometimes you’re in a marriage before you realize the value of a postnuptial agreement. Then you want the financial security spelled out.
It only makes sense to use a postnuptial agreement to avoid potential problems if the marriage doesn’t work.
As a family law attorney, we can help you negotiate your postnuptial agreement. If you’re in a marriage where you feel like your relationship would benefit from this type of agreement, contact us, and we’ll get started to work for you.