You got married without a prenuptial agreement. Everything in your marriage is going well, so why would you need a postnuptial agreement? A postnuptial agreement can offer security and clarity by establishing an understanding of how assets will be handled in a divorce. There are benefits and drawbacks to creating a postnuptial agreement, and it is important to take those into account before discussing it with your spouse.
What is a Postnuptial Agreement?
A postnuptial agreement is the same as a prenuptial agreement, except it is entered into after you get married. New York law decides how your assets are divided if you divorce. Still, you can create an agreement yourselves about how certain financial aspects of the divorce will be handled that allow you to avoid conflict and confusion should you ever divorce.
Requirements for a postnuptial agreement include:
- It must be in writing and signed by both parties
- The agreement must be notarized
- The parties must provide complete financial disclosure to each other
- Separate attorneys must represent each spouse
- Neither spouse is coerced or tricked into signing it, and there is no fraud involved
- The agreement must be fair and conscionable
Items a Postnuptial Agreement Can Determine
Postnuptial agreements cannot fully resolve every issue that you might face in a divorce, but they can account for many of them. In New York, your postnuptial agreement can include:
- Decisions about what is classified as separate property (thus not divisible in the divorce) and what is classified as marital property (which will be distributed in the divorce)
- Clearly defining what is considered pre-marital debt that will be treated as separate debt should the couple divorce
- The amount and duration of maintenance one spouse will pay the other spouse if the marriage ends
- Establishment of support for children of a prior marriage or relationship (even though not legally obligated, a spouse could agree to provide support for step-children)
- Establish agreement about inheritances for each other or for children or other third parties which can include waiving spousal inheritance rights or agreeing on certain bequests to specific people
Postnuptial agreements cannot include agreements about child custody or child support for minor children of the marriage. The court will determine child custody based on what is in the children's best interests at the time of the divorce. Child custody will be established according to state guidelines based on the parties' financial situation at the time of the divorce. A postnuptial agreement cannot require certain behavior by the spouses, such as the frequency of sexual intimacy or tasks around the house.
Pros & Cons of Postnuptial Agreements
Postnuptial agreements are considered to be a legally wise move, but there are interpersonal considerations to take into account as well. A postnuptial agreement benefits you by creating an enforceable agreement about your financial responsibilities to each other should your marriage end. Creating one saves you the time involved in litigating that part of your divorce, the extensive legal fees such litigation would generate, and creates a sense of certainty about that possible future.
A postnuptial agreement gives you the benefit of some years of successful marriage under your belt so that when you do negotiate this, you have greater trust and understanding than you might have had you attempted to create a prenuptial agreement. It also forces you to be open and honest about your financial situation in the present moment and can help you both feel more secure and comfortable.
On the other hand, a postnuptial agreement can create problems in a marriage that were not evident before or exacerbate existing problems, leading to serious issues of trust, cooperation, and suspicion—simply negotiating for a what-if scenario can create tension and force you to consider a future that may never become a reality, thus tainting a healthy relationship. If constructed carefully and with wise legal counsel, a prenuptial agreement should be enforceable, but ultimately that decision is up to the judge, so it is not completely ironclad.
Signs that You Need a Postnuptial Agreement
Your marriage has been a happy one until this point. Why would you want to rock the boat and negotiate a postnuptial agreement now? If you are a high net worth individual or couple, that alone is the very reason you need a postnuptial agreement. Dividing all of your assets in a divorce should you ever need one will be extremely complicated and expensive. A complex divorce can take years and cost tens of thousands of dollars in legal fees. A postnuptial agreement protects you and your spouse from that eventual outcome.
If your individual or marital financial circumstances have changed during the marriage, this is another indication that you should create a postnuptial agreement. When you entered the marriage, you did so under one set of financial circumstances. Those have now changed, and it is wise to consider those circumstances and create a plan for how to manage your financial holdings should you need to dissolve your marriage.
If your net worth has increased, there are simply more and more complicated assets to consider than when you married. If your net worth has decreased, this is another reason to create an agreement, to ensure you will each get a fair share of the assets that remain.
Other reasons include:
- You and your spouse have started a business together during marriage and need to clarify your ownership rights if the marriage ends
- One of you received an inheritance during the marriage, and you want to resolve what portion of that will remain as separate property and what will be converted to marital property and become subject to distribution in the divorce
- There has been a loss of trust in the marriage which might stem from infidelity or financial mismanagement
- You considered a prenuptial agreement before your wedding but did not have time to negotiate and execute one adequately
- You have a prenuptial agreement, but your circumstances have changed, and you need to renegotiate it in light of those changes
Postnuptial agreements can be a healthy, strategic way to plan for all inevitabilities while affirming the love and trust in your marriage. If you need help considering your options and working through the legal elements, please give our office a call 212.682.6222 or contact us online.