Although it is not common knowledge, you can contract a prenuptial agreement after marriage. "Postnuptial agreement" is the term lawyers use to describe this type of contract. Postnuptial agreements protect both parties in instances where assets or businesses may be affected if a separation were to occur. Having a prenuptial agreement represents good financial planning by couples. Discussing a postnuptial agreement may not be easy, but the conversation may lead to a stronger, more balanced relationship.
A postnuptial agreement is a contract between a husband and wife that defines the distribution of marital assets in the event of divorce or death. The postnuptial agreement is almost the same as a prenuptial agreement, except that couples sign it during the course of the marriage. Couples commonly enter into a postnuptial agreement for business purposes involving business partners; and to separate property in instances of community property purchases and in second marriages where assets may need protection for use by heirs. Postnuptial agreements used for business purposes can protect the partners of a business from spousal claims in case of death or divorce. In cases of community property purchases, in which one spouse uses his premarital property as collateral, a postnuptial can provide the spouse with the same benefits as he would have had with an individual property purchase.
In drawing up a postnuptial agreement, a couple needs to consider all assets and debts. Couples need to conduct an open and honest conversation about their current financial state and long-term goals, as well as property distribution in the case of death or divorce. Both spouses should have legal counsel representing their interests; without legal representation, the postnuptial agreement could face reversal in a court of law. It is advisable to review the postnuptial agreement periodically, as financial circumstances change. In case you relocate to another state it is important to review that state's laws to ensure that they do not affect the agreement.
What Is Included
A postnuptial agreement should include instructions about which spouse will obtain the home and other jointly-owned property in the case of divorce or death. The disposition of other assets either jointly or individually owned should also be clearly outlined in the document. The agreement should cover factors such as how debts accumulated during the course of the marriage should be handled upon divorce. Alimony and child support are other issues to include in the agreement, as well as instructions regarding insurance coverage. The agreement should also contain a detailed listing of all assets, debts and expectations of future revenues such as gifts or inheritances.
In the past, postnuptial agreements were sometimes overturned upon reaching the court. The courts review post nuptial agreements very carefully, mainly to protect the legal rights of the spouses. Prenuptial agreements that are signed before marriage are easier to uphold because the parties are thought to enter into them willingly and with the advice of counsel. After marriage, however, each person has legal rights to marital property and support in case the marriage ends. It is the court's job to ensure that the postnuptial agreement is not being used as a divorce-planning tool.