Ever heard of a prenup’s lesser-known cousin, the postnup? While prenups get all the attention before the “I do’s,” postnups (i.e., postnuptial agreements) are a way to sort out financial matters within your marriage after you’ve already tied the knot. They’re not just for the rich and famous anymore, either! Whether you’re worried about protecting your assets, navigating a tricky financial situation, or just want to get crystal clear about money matters with your partner, a postnup might be worth exploring. Let’s discuss how postnups work.
Who needs a postnup?
For starters, a postnup is a contract you choose to get with your spouse, it’s not mandatory. A postnup is a contract that a couple gets during the marriage with no intention to divorce. It’s a way to sort out their finances and other matters both during the marriage, in death, and in the event of a divorce.
Here are some examples of people who may consider getting a postnup:
- Marital issues: Couples who have experienced marital turbulence, such as infidelity, and want to outline the terms of their relationship in order to remain married.
- Unexpected money: Someone who has run into an unexpected amount of money, such as a large inheritance, winning the lottery, or starting a successful business.
- Unexpected life turns: A couple who has had unexpected lifestyle changes, such as having kids when originally not planned, changing careers, caring for other family members, or illnesses.
- Starting a business: If the couple started a business during the marriage, whether together or separately, they may want to work out any specifics about ownership in a postnup.
- Protecting children from other relationships: In a postnup, you can include certain clauses that make sure your kids get all of your assets in death instead of a second spouse. You can add a clause that basically says your second spouse can’t touch your estate if you die. You’ll still need other estate planning docs, such as a will, but adding this to your postnup provides extra protection for your kids.
- Missed opportunity to get prenup: Some couples planned on getting a prenup but got married and missed their window to get a prenup. So, they opt for a postnup instead.
- Clarify financials, obligations, and expectations: Some couples just like to have their ducks in a row. Maybe they didn’t think about a prenup before the wedding, or maybe they’re just now realizing how helpful it can be to have things spelled out. Whatever the reason, they want to make sure they’re on the same page about money matters.
The takeaway? Postnups aren’t mandatory, but they can be helpful for certain couples, depending on their situation.
What can be included in a postnup?
What can (and cannot) be included in a postnup is dictated by your state law. What you can put into a postnup in California is not the same as in Illinois, and so on, so forth. However, here are some general clauses that may be included in a postnup:
- Property division
- Businesses
- Real estate
- Retirement accounts
- Inheritances
- Other personal property
- Spousal support (a handful of states do not allow this)
- Waiver of elective share (meaning one spouse cannot take from the deceased spouse’s estate)
- And more.
Postnups can include any matter that isn’t against the law or public policy of your state. Keep in mind that a few states specifically limit what can go into postnups, so in those states, you will be limited to only including property rights.
How is a postnup created?
Traditionally, postnups are drafted by an attorney and reviewed by the other spouse’s attorney. Nowadays, you can generate postnups online. However, you still may need attorney assistance, even if the postnup is done online. Postnups must follow certain rules laid out by each state. Here are some general rules that most states require of their postnups:
- The agreement is in writing and signed
- The postnup is notarized
- The postnup has “consideration,” which means each party “gets” something in exchange for signing the agreement
- Both spouses provide each other with financial information (income, assets, debt, inheritances)
- Both spouses entered into the postnup voluntarily and knowingly
- Both spouses had the opportunity to consult with their own attorney
- Some states explicitly require attorney representation for a postnup to be valid
Note: Every state is different and has its own rules, so make sure you check with your state laws to understand what is required of your state.
How is a postnup enforced?
Postnups don’t come into play until a couple gets a divorce. When a couple gets a divorce, they bring their originally signed postnup copy to their divorce attorney, who will then take that to the presiding divorce judge to enforce the terms of the agreement into the official divorce decree. In other words, the judge will “order” the same things you have in the postnup, given that the terms are enforceable. Either spouse can challenge the validity of the postnup and its terms. Whether or not that challenge is accepted by a judge is circumstance-dependent.
Postnups are usually treated with stricter scrutiny by judges than prenups. This means a judge will analyze a postnup closer than it would a prenup. This is because postnups are created during a marriage, where spouses have a confidential relationship, which has complexities that aren’t usually present when people make a contract, such as a business contract.
Drawbacks of a postnup
While postnups offer plenty of valuable benefits like peace of mind, marital harmony, and financial protection, it’s important to consider the potential drawbacks. First off, they can be pricey since you’ll definitely need a lawyer’s help. Also, because they’re relatively new in the legal world, courts tend to examine them more closely than prenups, sometimes making them harder to enforce. Postnups often come with stricter requirements too, like making sure both sides have their own attorney. And perhaps most importantly, if one spouse isn’t on board with the idea, discussing a postnup can create tension and strain in the relationship.
The bottom line on postnups
So, there you have it – the lowdown on how postnups work. They can be a powerful tool for protecting your financial future and building a stronger foundation for your marriage. Just remember to weigh the pros and cons, talk openly with your partner, and seek legal advice to make sure a postnup is the right fit for you.
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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