POV: You and your spouse decide to create a postnuptial agreement to protect your assets and create marital harmony. You carefully draft the document, both sign on the dotted line, and breathe a sigh of relief… only to find yourselves battling it out in court years later because of unforeseen circumstances and simmering resentments. While postnuptial agreements can be powerful tools for couples seeking financial security and peace of mind, they can also become sources of conflict if not crafted with care and transparency. This article explores the most common disputes that arise in postnuptial agreements and, more importantly, provides practical strategies to help you avoid these pitfalls and create an agreement that truly strengthens your marriage.
Financial disclosure disputes
Financial disclosure is typically required in every state for postnuptial agreements to be considered valid and enforceable. Financial disclosure is when both spouses share the values of their assets, debts, income, and inheritances with one another. It helps each party understand what they’re agreeing to when they enter into the postnup.
A dispute over financial disclosure may include one spouse arguing that the other hid certain assets or debt from them, downplayed the numbers to be not quite as truthful as they should’ve been, or that they never received financial disclosure whatsoever.
How do you avoid a financial disclosure dispute?
- Honesty: Share the values of ALL of your assets, income, debts, and future inheritances with the utmost honesty–this means providing the most accurate values possible. And don’t leave anything out.
- Financial professional help: If you have complex assets, such as hedge funds or business assets, consider using a third-party financial professional to assist with valuation.
- Backup documentation: Provide financial documentation to back up the values of your assets, debt, and income. Make sure both parties initial each page. For example, provide paystubs to show income and bank statements to show balances and attach them to the postnup itself.
- Waiver of further financial disclosure: Include a clause in the postnup waiving any further financial disclosures, essentially stating each spouse had the opportunity to independently investigate the other’s finances and is voluntarily agreeing to these terms.
Duress and coercion disputes
Postnups (and any contract for that matter) must be signed voluntarily–without fraud, duress, coercion, undue influence, mistake, misrepresentation, etc. Each spouse must enter into the agreement voluntarily.
When duress disputes arise, it’s typically because one spouse is claiming that they were pressured, threatened, forced, tricked, or unduly influenced into signing the agreement. This may be due to a variety of factors, including uneven power dynamics, a vulnerable spouse, physical threats, financial threats, and other factors.
How do you avoid a duress or coercion dispute?
- Hire lawyers: Make sure both spouses have their own independent legal counsel of their choice. This may help show that neither party was coerced or duressed because they had a legal advocate on their side helping them make the decision to sign the agreement or not.
- Time to sign: Allow both spouses ample time for review and consideration of the agreement. One spouse should not “spring” the agreement on the other spouse the day before they’re required to sign it.
- Avoid vulnerable times: Don’t require that the postnup is signed during a vulnerable time–such as pregnancy/postpartum, during a grieving period, during immigration processes, or other sensitive times.
- Add a clause: Add a plain language clause to the postnup that states neither party is being pressured, forced, or coerced to sign the agreement and that both spouses are voluntarily entering into the agreement.
Fairness disputes
The legal term for fairness disputes is usually called “conscionability,” –If an agreement is deemed unconscionable, it means it’s unenforceable because it’s egregiously one-sided or unfair. In plain English, a court analyzes the reasonableness and fairness of the terms of the postnup. Is it overly one-sided?
One spouse may dispute that their postnup is unfair because they get nothing out of the agreement or very little in comparison to what their spouse is getting. Of course, postnups are not required to split assets 50-50, but being reasonable is generally required, meaning each party benefits in some way from the agreement.
How do you avoid a fairness dispute?
- Hire a lawyer: Local family law attorneys have seen it all when it comes to postnups and can generally help you understand what courts in your state will deem as reasonable and fair.
- Ensure each spouse has at least one provision in their favor: Each spouse should walk away with at least one benefit from the agreement. Again, this doesn’t mean it needs to be a 50-50 split of assets, but just that each party is getting something out of the arrangement.
- Negotiate: If each spouse negotiates the terms of the agreement and does not just accept the first agreement that they see, it can indicate a fair agreement because each party advocated for their needs.
Understanding the agreement disputes
Each spouse should understand what they are signing. The agreement shouldn’t be so complex that the spouse has no idea what the terms are. In the same vein, they shouldn’t be tricked into signing the agreement because they are told it’s one thing but it’s actually another thing.
Some people may be able to argue that they didn’t understand what they were signing. Whether the agreement was too complex, it wasn’t translated, they didn’t have legal counsel, or something else.
How do you avoid an understanding dispute?
- Translate the agreement: If either party’s first language isn’t English, translating the agreement is crucial to avoiding misunderstandings. Make sure it is translated by a court-approved translator.
- Hire a lawyer: Hiring independent legal counsel for each party helps avoid the dispute that one party doesn’t understand what they are signing because the lawyer will explain it to them.
- Time to sign: Don’t spring the agreement on the person on the same day they are required to sign. Allow them time to read the agreement and digest the terms.
- Don’t make it too complex: Overly complex terms can make the agreement difficult to understand. You can typically achieve your goals with a postnup without overcomplicating it.
The bottom line
The most common disputes with postnups are disputes over financial disclosure, duress, fairness, and understanding of the agreement. Some tips for avoiding all of these disputes include 100% honesty in preparing the agreement, hiring independent counsel for each person, allowing enough time for people to read and review the agreement, and avoiding overly pressuring either spouse into signing. By doing these things, couples may create a valid and enforceable agreement that supports their marriage and facilitates marital harmony.
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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