Money and Relationships: Postnuptial Agreement
Many people who marry young don't even think about a prenuptial agreement. Oftentimes, this is because young people don't have assets to consider before the marriage takes place. But what happens when things change? Can a couple sign a prenup post nup? Thankfully, yes. At any point during the marriage, a couple can sign a legal agreement about their finances, aka a postnuptial agreement. Let's look at this idea a little more in depth.
Who Needs a Postnup?
Postnuptial agreements are actually more common than many people may think. They can be signed for business purposes, for estate planning, and for individual property ownership, among many other reasons. In fact, just as with the prenuptial agreement that we discussed in a previous post, postnups can be signed for many other reasons as well, like when finances change for joint goals such as college or stay-at-home parenting.
One of the more common reasons to enter a postnup is for business reasons. Sometimes, when entering into a joint business venture, the partners will all agree to have postnuptial agreements drawn up to protect the business from spousal claims in the case of a partner's divorce or death.
What Should I Know?
Okay, so now that the common reasoning behind drawing up a postnup is laid out, it's time to look at the practice more in depth. Postnups are very similar to prenups; they are both legal documents that state the terms and conditions of the finances upon divorce or death. The only difference is the timing. Prenups are drawn up a month or more before the wedding, and postnups are completed at any point after the marriage takes place.
All of the legalities are the same: drawing up a legal and binding document is best completed with an attorney, on paper (rather than a cocktail napkin), and signed in front of a witness. However, in the case of a postnup, it may be best to have two separate attorneys, a practice which can help ensure that neither party is coerced into giving up rights – and that the courts accept the document.
On that coercion point, we come to the intense scrutiny of postnups in the court system. Postnuptial agreements are rather a new practice, so many courts may look for fault in the document. (Some states may not even allow postnups; check with your attorney to be sure). It is very important to be as fair as possible when drawing up a postnup since it will be scrutinized heavily upon divorce or death.
Just as most couples rarely dream of creating a prenuptial agreement, most married couples don't wait on baited breath for the arrival of their first postnup. Even so, the document can be a saving grace for both parties, should anything change in business or finances over the years.