You and your spouse have worked hard to build successful careers and a beautiful home together. Now you’re ready to have children and start the next chapter of your life as a family.
That is a picturesque goal; however, just as with marriage, it’s important to consider what could go wrong.
If one spouse is going to be a stay-at-home parent, you’ll want to think about what walking away from a successful career to raise children will mean. Often, stay-at-home parents face several negative consequences from this choice.
The "career pause penalty" means staying home with children can cost a parent income, promotions, and networks. If there’s a divorce, the price of pausing a career is even higher.
You’re obviously not planning to divorce. As a loving, supportive partner, you’ll want to keep in mind what will happen to your spouse if the marriage crumbles after they’ve been out of the workforce for years.
A postnuptial agreement not only protects a spouse who has sacrificed for their family but also addresses changes that occur during a marriage. It can clarify how assets, debts, and responsibilities will be managed as circumstances shift. For example, even if you have a prenup, the terms may become outdated over time. Revisiting and updating your agreement based on your current relationship can provide reassurance and structure for you, your spouse, and your children.
Is Your Prenup Outdated?
Your marriage will change over time, and your prenup may eventually lose relevance. It may be outdated if:
- You have children now. A new agreement can safeguard your children’s future as you make decisions about inheritances. This also applies if you or your spouse brought children into the marriage.
- There have been changes in career and income. A parent leaving the workforce to care for children is one scenario. Your prenup may also be outdated if someone has had a significant increase in income from career mobility.
- There have been other financial changes. Receiving inheritances, buying property, or starting or expanding a business also warrants a change in the marital agreement.
- Health status has changed. If one spouse in a marriage becomes ill, a new agreement can address long-term medical care and other financial challenges.
- Debt amounts have changed. If you or your spouse paid off or incurred debt during the marriage, a postnup should reflect this.
Even if you didn’t sign a prenuptial agreement, you can still get a postnuptial agreement. These factors are always relevant, so it’s never too late to protect your loved ones.
How to Approach the Postnup Conversation
Bringing up a postnuptial agreement may feel uncomfortable, but it doesn’t have to be. Here are some ways to make the conversation easier.
-
Be strategic: Have a plan before you raise the issue. Consider why you want a postnuptial agreement, how it will benefit your family, and which areas it can address.
Timing is important. The best time to bring up a postnuptial agreement is when you and your partner are on good terms. It may seem like this will create conflict, but it’s actually when people are the most open. If you’re having challenges in your marriage, your spouse will be less receptive to discussing the topic and may run the risk of being perceived as getting them to sign under duress.
-
Be positive: Explain to your partner that you want to do this because it’s what’s best for your family, not because you have doubts. Explain the benefits for both of you of protecting what you’ve built together. It’s about peace of mind and security, not anticipating failure.
-
Be honest: Explain to your spouse any concerns you have about the future. Provide your partner with a clear understanding of how a postnup may alleviate their concerns. Don’t be combative, but be as honest as possible.
-
Encourage separate attorneys: Tell your spouse that you’d like help drafting this document from attorneys for both of you. This helps ensure that both of your interests are represented and you’re treated fairly.
-
Be sure to listen: If you and your partner have not discussed a postnup before, this conversation may come as a shock. After you’ve explained your point of view, listen to what your partner has to say.
This is not a time for debate. Don’t try to convince your spouse of your point of view right now. Just listen with an open mind.
-
Give your partner space: A postnup is a lot to think about. Give your spouse room to digest what you’ve discussed. This can be an ongoing conversation, but don’t turn it into a pressure campaign. It’s a collaboration, not a confrontation.
What Should Be Included in a Postnup
Once you and your partner have agreed to move forward with a postnup, you’ll want an agreement that addresses:
- Spousal support. The family's breadwinner can pledge to pay a specified amount of spousal support to the stay-at-home parent. An updated marital agreement should reflect the primary caregiver's childcare and homemaking contributions and provide fair payments.
- Assets: Including how joint and individual assets will be distributed in a postnup can prevent significant conflict later. Asset distribution should be fair for both partners, not just the breadwinner. Also, consider what will be distributed to the children, including any from a previous marriage.
- Retirement accounts: Decide whether to treat retirement accounts as community or individual property and how to divide them. Also, think about survivor benefits for your spouse from your 401(k) or pension plan.
- Business ownership: A postnuptial agreement should also specify whether a business is classified as separate or marital property. Include provisions on how earnings would be divided.
- Debt: In addition to dividing assets, a postnuptial agreement should address how debts will be handled. For example, if either of you has incurred debt during the marriage, you can decide who will be responsible for it. This can also apply to any debts that existed before the marriage.
No matter what is included in your postnuptial agreement, the language should preserve family harmony. This document is designed to provide clarity, not create conflict. The more explicitly the terms are spelled out, the better.
Also, a dispute resolution clause can reduce the risk of future conflicts. Detail how disagreements should be handled to save a lot of time and stress.
A breadwinner and a stay-at-home parent alike will play important roles in the family. Whether you had a prenup or not, a postnup can protect what you’ve built in your marriage and foster a sense of cooperation and respect for the other party.
Having a family can be a rewarding journey, so neither partner should be left vulnerable if the relationship takes a turn for the worse, especially if one chooses to be with the children rather than hire outside help. If you want guidance on drafting a fair and respectful postnuptial agreement, call our attorneys at Bikel Rosenthal & Schanfield LLP at 212.682.6222 or connect online.