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Understanding postnuptial agreements

Maybe, like many couples, you and your spouse saw no reason for a prenuptial agreement when you got married. Perhaps you each came into the marriage with little more than a small checking account, a credit card, some IKEA furniture and a pile of student loans.

Now, your financial life has gotten more complicated, and you’re wondering if that was a mistake. While it’s too late for a prenup, you can draw up a postnuptial agreement. It’s essentially the same type of document. 

Does a postnuptial agreement mean your marriage is on thin ice?

Some people fear that a postnup is just a precursor to divorce. That’s not true any more than a prenup means you’re planning to eventually divorce. It’s simply a way of laying down some markers regarding who will walk away with what and whether both spouses will have some financial protection should the marriage end. Further, now that you’ve been married for (at least) a few years, you’re in a better position to prepare for the future. 

When should you consider a postnup?

Almost any couple can benefit from having a postnup. However, it’s particularly important for any of the following situations:

  • One of you earns substantially more money than the other
  • One or both of you owns their own business or is a partner in a business
  • One of you has accumulated a large amount of debt
  • One spouse has stopped working or gone off their planned career path to care for the children.
  • One spouse has supported the other while they got a graduate or professional degree or started a business that ended up allowing them to make a large amount of money.

A postnup can protect both a spouse who is “worth” more on their own in terms of assets and earning power from giving up more than their fair share in a divorce. However, it can also protect the non-earning or lower-income spouse from being thrown into a drastic change in lifestyle in a divorce.

As with a prenup, each spouse should have their own family law attorney representing their interests in a postnup. If both spouses’ legal rights aren’t protected, it could be ruled invalid if it ever needs to be used. Your attorney can provide more guidance on what to include in your postnup based on your unique situation and goals.