POSTNUPTIAL AGREEMENTS

For a broader understanding of postnuptial agreements as valid agreements between spouses, please review the content on our “Prenuptial Agreements” page. The same premises exist for both Prenuptial Agreements and Postnuptial Agreements. Parties are allowed to enter into a binding agreement between themselves memorializing the terms of their marital finances, distribution during divorce, waivers and opt-outs from the law. The law gives great deference to these agreements.

A common question is:

“I’ve heard through the grapevine that postnuptial agreements aren’t as valid and enforceable as prenuptial agreements. Is this correct information?”

The answer is it is incorrect information.

So long as the postnuptial agreement meets the same baseline conditions as a prenuptial agreement, it is just as enforceable. These conditions include: notarizations with the proper associated acknowledgement paragraph, statements of net worth, lack of fraud, duress and coercion, conformity with public policy and general obligation laws, and ideally, attorneys representing both parties.

Agreements need to have “consideration.” Consideration includes the terms, conditions, barters and exchanges in the agreement. In a prenuptial agreement, the parties’ entering into the marriage is also typically listed as consideration. Obviously, in postnups, that consideration factor must be supplanted since the parties are already married.

What are some of the impetuses for parties to seek a postnuptial agreement?

• The parties have the intention of entering into an agreement before they get married, but they prioritize their wedding. They do not want to get into the weeds of a prenuptial agreement. They want to enjoy their festivities. Both parties 100% trust each other on this. They mutually feel that since at least one of them wants an agreement, the other will oblige and enter into a postnuptial agreement shortly after the wedding festivities, when the parties return to their post-wedding bliss daily lives.
• The parties enter into a prenuptial agreement, but it feels rushed. It is either too close to the wedding or they cannot agree on all points in time for the wedding, so they table some points or don’t take affirmative stances. They enter into a prenuptial agreement before the wedding, and to ensure they are both protected and neither party can claim coercion or duress, that they were not able to negotiate fairly facing the time pressure of a looming wedding date, they enter into a postnuptial agreement after the wedding to ensure the time pressure element is nonextant. This strips both parties of the ability to overturn the prenup due to coercion and duress claims and ensures it is more enforceable.
• The parties wish to amend a prenup to reflect their reality. In these situations, the parties entered into a prenup, but at some point, into their marriage, it no longer feels timely. It feels imbalanced, unfair, and inapplicable to their lives. They view the prenup as a document that should be fluid, flexible, and not stuck in their pre-marriage mindset. Some examples of this include:
  • a) The parties mutually waive spousal support in their prenup, but then they have children and decide one party should stay home to be the caregiver, putting their career and earning ability on hold through the process. They agree that they did not foresee this, but that having children can change people, admit they underwent such a change, and agree that they should commemorate their updated sentiment in a postnup to compensate the stay-at-home parent with the ability to receive a spousal support award.
  • b) A woman of average means marries a man who comes from a very high net worth real estate development family. They enter into a prenup to protect his family’s business and wealth. Everything in the prenup is separate property, but the wife is entitled to what’s termed a “Distributive Award,” which would be a cash sum. The prenup may also allow for a maintenance award with a cap on the amount payable. Fast forward 7 years. The couple now has 3 children, and the wife has been helping the husband in his real estate business, which has increased tenfold in value since their marriage date. The parties agree that the Wife should receive higher distributive and maintenance awards in the event of a divorce. They enter into a postnup to give the wife significantly more than their initial prenup contemplated.

• The parties are happily or functionally married and one of them is about to receive an inheritance or large gift from a parent. By law, inheritances and gifts from third parties are the recipient spouse’s separate property, so long as they keep it separate and don’t commingle it with marital funds or gift it to their spouse. Despite this, many married individuals who receive large inheritances and gifts want to take the added precaution of cementing it as their separate property in a postnuptial agreement. They want to be very direct and unequivocal with their spouse that in this regard, “What’s mine is not ours.” This can be important when the inheritance/gift receiving spouse plans on using the funds towards an asset. They may be trying to ensure the asset remains their separate property, even if their spouse contributes to it, and want to put such terms to formalized pen and paper.
• The parties are happily or functionally married and buying a marital home together. They have a specific way they want to designate ownership and rights to the home in the event of a divorce and wish to memorialize their desired terms in a postnup.
• One party has been diagnosed with an illness or is getting progressively worse from a pre-diagnosed illness. The illness can be in any form – cancer, auto immune. I also commonly see degenerative conditions, such as those that could lead to eventual blindness or loss of muscular function. The diagnosed party is the one I tend to see who requests the postnup, not the healthy party. They feel vulnerable. They may be working and fully functional, but the illness casts an uncertain murky future. They want a degree of security from the postnup, so that if their health goes south, they feel they will be taken care of.
• The parties have different viewpoints and sensibilities regarding finances, investing, and risk tolerance. The parties wish to remain married because everything else about their marriage is working well enough, so the parties enter a postnup to iron out financial terms. Think of a couple with 4 children who have been married for 16 years. They both work conservative steady income jobs. The wife decides she wants to start investing in real estate and other business ventures. The husband isn’t interested. The wife doesn’t want to be held back by the husband’s disinterest in investing and venturing into unchartered territory for them. She is in her 40’s, feels she has paid her dues, held that steady eddy job, and raised her children. Her marriage is good enough for her sensibilities, and she does not wish to be divorced. The husband recognizes this as well. As a concession, they enter into a postnup designating separate property funds, investments and interests, while still maintaining a household account.
• Infidelity prompts the postnup. One party has been unfaithful and had an affair. The faithful party wants to remain in the marriage but wants a clause penalizing further infidelity as teeth to prevent it and as compensation for the distress of repeated occurrences. Infidelity must be specifically defined in concrete terms that can be proven and enforceable. As an example, you may see something like equitable distribution being 65% in the faithful party’s favor in a postnup prompted by infidelity, where hotel and gift receipts are produced, along with photos and texts.
• The marriage is on the rocks, hanging on bare threads, but there is a chance of reconciliation, even if miniscule. When there is a possibility the parties may stay together, we favor first doing a postnup, and not a separation agreement. A separation agreement is final. It marks the end of the intention to remain married, with no window for reconciliation. We are always in favor of giving parties that margin of hope to see if there is any path forward as a married couple. Marriage is not something that should be taken for granted. It is important that the finality of a separation agreement or divorce happen only when the circumstances are completely ripe for it and all efforts to continue the marriage have been exhausted.

Several driving forces for postnuptial agreements are illustrated above. These are merely a few examples in a wide landscape of scenarios.

Feel free to contact us for specifics about your situation.