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Making Sense Out of Dollars

The Postnuptial Agreements

Part 2 of 4

Joel Lerner
Posted 12/3/21

Cautions About Postnuptial Agreements

Courts look with great scrutiny upon postnuptial agreements. Historically, postnuptial agreements have not been permitted. Originally, this was because a …

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Making Sense Out of Dollars

The Postnuptial Agreements

Part 2 of 4

Posted

Cautions About Postnuptial Agreements

Courts look with great scrutiny upon postnuptial agreements. Historically, postnuptial agreements have not been permitted. Originally, this was because a married couple was considered just one person and so could not contract with itself.

More recently, this was because a postnuptial agreement was thought to encourage divorce. Nowadays, most states probably do enforce postnuptial agreements, but great care must be taken to negotiate them in good faith.

The reason for more careful treatment of postnuptial agreements over prenuptial agreements is the legal rights of the people involved. Prior to marriage, neither person has any legal family law rights on the other. Therefore, a person is not giving up any rights when they enter into a prenuptial agreement.

However, the situation between married couples is very different - both parties have very well defined legal rights regarding support and property division. So, when they negotiate a postnuptial agreement, they will be giving up some of these rights. Because of this, it is very important for both parties to each have an attorney and to really bend over backwards to be fair in the postnuptial agreement.

Another reason that courts really scrutinize postnuptial agreements carefully is that they are often used maliciously as “divorce planning” tools. If someone believes that their marriage is ending, they may pressure their spouse to enter into a postnuptial agreement. For instance, in one case, the wife threatened to deny the husband access to the children if he did not sign the postnuptial agreement. The court invalidated the agreement because of this.

In addition, in some states, a postnuptial agreement cannot include a release from the alimony obligation. As well, the same sort of terms that can’t be included in a prenup also can’t be included in a postnuptial agreement.

Children can very quickly change things too, especially if one of the parents decides to stay home and maintain the household on a full-time basis. The fact that they will be either giving up or putting their career on hold might very well mean that they will want some financial assurances moving forward. It’s actually the addition of children that many couples cite as the reason for signing a postnuptial agreement after the wedding.

These types of agreements can also come into play if the couple is going through a bad patch and are trying to reconcile. As backwards as that may sound, having assurances that a long drawn out battle in the courts aren’t going to ensue if the reconciliation attempt fails. As you can see, there are plenty of reasons why an agreement between a couple can be reached that fairly divides the assets, and it can even be done while they are still in the honeymoon phase.

Circumstances may dictate that putting an agreement in place before marriage is not necessary, but as individuals grow both financially and personally, having protection in place for your assets if the relationship were to dissipate can be handled legally with a postnuptial agreement.

THOUGHT OF THE WEEK

“A drunken person’s words are a sober person’s thoughts.”

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