When should a couple start considering a postnuptial agreement? This is a great question, and the answer is you should consider a postnuptial agreement in several different scenarios, such as after some marital turbulence if you want to get aligned on finances, and more. Just remember that a postnuptial agreement is NOT appropriate if you are already set on getting a divorce. You should skip the postnup and go right to a divorce attorney who might help you draft a separation agreement or something of the like. With that said, let’s dive into all of the scenarios where you should consider a postnuptial agreement.
Consider a postnup if you’re experiencing marital issues but still plan on remaining married
The key here is that you want to remain married, but you’re experiencing some marital issues. Maybe one person has some gambling issues, and you want to clarify financial obligations to ensure the other party isn’t responsible for certain debts. Maybe it’s infidelity, and you want to use the postnup as a reconciliation tool. Whatever the case may be, using a postnup to outline certain marital obligations and compromise on certain issues is a great path toward marital harmony.
Remember, if you’re experiencing marital issues and are set on divorce, a postnup is not the document for you. Speak with a divorce attorney to understand what your next steps should be.
Consider a postnup if you recently started a business
In some states, starting a business during the marriage means that the business is joint property, regardless of whose name is on the business. If you created a business that your spouse is not part of, you may want to consider getting a postnup to outline business ownership and interests and ensure they are completely separate in the event of a divorce. Without a valid and enforceable postnup stating otherwise, the value of your business interests and ownership can be split up in a divorce.
Consider a postnup if your partner has recently taken on debt
Again, in some states, whatever is accumulated during the marriage is 50-50, including debt. And, yes, even if your name isn’t on said debt. This can be scary for some folks when they know their partner has a lot of debt. Especially debt taken on during the marriage. Getting a postnup can ensure debt stays in the ownership of the person who took it out–giving the other spouse an insurmountable amount of peace of mind.
Consider a postnup if you want your estate to pass to someone other than your spouse
There’s something called the “elective share” law in some states, which allows surviving spouses to take a portion of their deceased spouse’s estate, EVEN IF THEY WERE WRITTEN OUT OF THE WILL. Yes, that’s right, we used all caps for that one. It’s important to understand that some states say even with your estate plan in place, devising all of your assets to someone else when you die, your spouse can potentially still take a portion of your stuff. Yikes! Never fear, the elective share waiver is here! You can make sure BOTH spouses waive their right to this elective share right and ensure that they cannot take a portion of their deceased spouse’s estate.
This might be important for someone with children from a previous marriage who wants their whole estate to pass to their children and not their second spouse.
Consider a postnup if you are about to receive an inheritance
Receiving an inheritance from a family member is one reason you might want to get a postnup. In some states, inheritances are automatically separate property. However, it’s not true in all states. Either way, even if you’re in a state that keeps inheritances separate, there are things like commingling and marital contributions that can give the other spouse interest in your inheritance. Having a postnup in place can help ensure that your inheritance is kept separate in a divorce.
Consider a postnup if you’re about to make a large purchase, such as real estate
If you’re about to make a large purchase, such as a house or rental property, you should consider how this purchase will be treated. Is it one person’s property, or is it shared equally? What about the debt it took to purchase it? Having a postnup in place can help square away any issues over ownership, mortgage obligations, and other incident matters to a large purchase. For example, you can say that assets in joint title are split 50-50, but assets in individual title are separate property. This can help give you the guidelines on how to acquire the new purchase.
Consider a postnup if one party is going to forgo a career to stay home with the children
If two people enter into a marriage completely self-sufficient and then one day decide to have children and they want one person to be a stay-at-home parent, you should consider a postnup. Why? Because the person forgoing their career is losing out on money and experience. If there is ever a divorce, the stay-at-home parent is going to be in a disadvantaged position, despite providing valuable services (homemaking, childcare, cleaning) for many years. Having a postnup providing for the stay-at-home parent, through lump sum cash, the marital home, or other mechanisms, will help them be financially secure.
Consider a postnup if life has changed drastically since you signed your prenup
If you already have a prenup, but things have changed—maybe you had kids unexpectedly, one person received a large inheritance, one person won the lottery, or something else drastically changed, you might want to consider amending your prenup (which is technically a postnuptial agreement). Amending your prenup is a bit different from getting a new postnup, as it requires making a few changes and attaching an amendment page to the prenup. Whereas creating a postnup is creating a whole new document.
Consider a postnup if you want to get on the same page as your spouse
Whether it’s about inheritances, businesses, lottery winnings, or something else, getting a postnup can help you get on the same page with your spouse over several different matters. Plus, there is a requirement in virtually every state that you must share all of your income, assets, and debt with your spouse during the postnup process. This helps create a truly transparent environment where you two can be open and honest about your future together.
The bottom line on when to consider a postnuptial agreement
Life throws curveballs…Maybe you’re starting a business, dealing with unexpected debt, or even navigating some bumps in your relationship. A postnup can help you address those challenges head-on and create a plan that works for both of you.
Think of it as a way to build a stronger foundation for your marriage. By talking openly about your finances and setting clear expectations, you can avoid misunderstandings and protect each other down the road. Plus, it can give you peace of mind knowing that you’ve got a plan in place, no matter what life throws your way.
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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