Relationships change, financial situations increase and decrease, and priorities shift. This is all part of life. Sometimes, married couples need to get a postnuptial agreement (postnup) to adapt to the ebbs and flows of life. A postnup is a contract between a married couple that intend to stay married and want to outline certain financial matters. However, if getting a postnup agreement is out of the question for whatever reason, there are some alternatives you can consider! Let’s explore some potential alternatives to postnuptial agreements.
Reasons you may not be able to get a postnup
Sometimes, a postnup may not be possible, whether for personal reasons or external reasons. Let’s discuss some of the reasons someone may not be able to get a postnup. Here’s what to consider:
- Postnups are not enforceable in every state
- In some states, postnups are more favorable than in other states, which means even though they may be enforceable in a state, they may be easily thrown out
- Some people may not be able to afford getting a postnup
- Both parties in a marriage may not agree to getting a postnup (both spouses must be onboard with signing this document)
- A postnup may be taboo in some couples’ culture
Whatever your reason for not being able to get a postnup, there are a few alternatives. Let’s discuss those.
Alternative 1: Creating a trust
A trust is a legal instrument that can be created through various methods, but the most common is the transfer of property by the owner during their lifetime to another person, known as the trustee. A trustee has the duty to manage the trust property in accordance with the trust creator’s intentions for the benefit of the beneficiaries. Depending on the type of trust created, a trust could offer the creator (also known as settlor) great flexibility over asset distribution.
For example, if protecting premarital assets is the goal, as an alternative to a postnuptial agreement, a spouse could establish an irrevocable trust to protect certain premarital assets from divorce. When properly funding a trust, the settlor (creator) is required to transfer assets to the trust by taking it out of their name and re-titling to the trusts name. When properly funded, the individual who created the trust no longer owns the assets, but the trust does, thus shielding the assets from division.
Although an irrevocable trust may seem appropriate, it should not be taken lightly and you should seek advice from a licensed attorney.
Alternative 2: Ensuring no premarital assets are commingled
If a postnup is out of the question, but your goal is to protect pre-marital assets, you may be able to still keep them separate in a potential divorce by ensuring they aren’t commingled. Commingling is when you mix different categories of assets together. For example, depositing pre-marital separate funds into a joint account or adding a partner on the title of a deed that was pre-marital property. Generally, many states will keep pre-marital assets separate, however, that generally goes out the door when assets get commingled. Pre-marital assets may then be divided in a divorce if they were commingled.
So, if you don’t want to or cannot get a postnup but have the goal of protecting pre-marital assets, one alternative you can optimize is making sure whatever you want to protect isn’t commingled. So, there should be no mixing of assets or adding people to titles.
Alternative 3: Financial counseling and open communication
If your main goal for a postnuptial agreement is financial transparency and creating more open communication over finances, you may want to consider financial counseling. Proactively addressing financial issues you have head-on can help prevent future disputes, potentially even in a divorce proceeding.
For example, if a couple has issues with one person’s spending habits, going to financial counseling may help reduce those issues, even without getting a postnuptial agreement. However, counseling isn’t foolproof, of course, because it doesn’t provide real legal protection. Counseling also depends on the couple’s ability to communicate openly and commit to any recommendations from the counselor.
Alternative 4: Couples therapy
If the reason for the postnup is marital issues, such as infidelity, financial qualms, or a general breakdown of the marriage. Sometimes, people use postnuptial agreements to reconcile their marriage. However, going to couples therapy consistently may be one alternative to getting a postnup. A true commitment to couples therapy can help address relationship issues and improve communication and conflict-resolution skills. It can also create more trust within the relationship.
On the other hand, couples therapy is not real legal protection. It’s just a way to attempt to resolve any issues organically within the relationship. It also requires real buy-in on the therapy process from both spouses in order to be effective.
Alternative 5: File for divorce (last resort)
Getting a postnup is typically not about getting a divorce, but rather keeping the marriage intact. Postnups legally should not be made in contemplation of a divorce. Instead, postnups are about laying out financial obligations with the intention of staying married. However, in some cases, people may be seeking a postnuptial agreement as a tool for reconciliation. If this is you, and you aren’t able to get a postnup for whatever reason, you may want to consider going straight for divorce, depending on how dire the situation is. You should speak with both a couples therapist and an attorney to see what is the best next steps for you.
The bottom line on common alternatives to postnuptial agreements
The bottom line is that there is really no one-to-one replacement for a prenup or postnup agreement. However, there are some alternatives that may be able to accomplish certain goals, such as mitigating marital issues, protecting premarital assets, and facilitating financial conversations. You might consider establishing a trust, making sure premarital assets aren’t commingled, or seeking counseling. Check with your state laws or a lawyer to see if postnups are enforceable in your state and make sense for your situation. A happy marriage often thrives on open communication and financial planning, so prioritizing these areas is a great investment in your relationship and future.
Nicole Sheehey is the Head of Legal Content at HelloPrenup, and an Illinois licensed attorney. She has a wealth of knowledge and experience when it comes to prenuptial agreements. Nicole has Juris Doctor from John Marshall Law School. She has a deep understanding of the legal and financial implications of prenuptial agreements, and enjoys writing and collaborating with other attorneys on the nuances of the law. Nicole is passionate about helping couples locate the information they need when it comes to prenuptial agreements. You can reach Nicole here: Nicole@Helloprenup.com
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