Most individuals are familiar with prenuptial agreements. A post-nuptial agreement is something that is not talked about as much. Where a prenuptial agreement is entered into before a couple ties the knot, a postnuptial agreement is entered into after the parties are already married. Prenuptial agreements are entered into in exchange for the parties getting married; postnuptial agreements are sometimes entered into in exchange for the continuation of the marriage. In other words, in some cases, a postnuptial agreement can prevent a couple from divorcing.
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Many family law attorneys frown upon postnuptial agreements for a variety of reasons. For one, if the postnuptial agreement is a worse deal than an actual divorce, an attorney would not recommend it. Furthermore, many couples do not consider the continuation or postponement of a divorce to be a sufficient compromise in exchange for bargaining away their rights.
Courts generally exercise more scrutiny for postnuptial agreements as opposed to prenuptial agreements. These agreements are, at their core, contracts. In every contract, there must be “consideration” for the exchange. The principle behind consideration is that each party to a contract must give up something of value in exchange for what they receive under the contract. When it comes to postnuptial agreements, courts frequently question whether there is enough consideration to support the terms. As a result, it is best practice for a postnuptial agreement to explicitly state the consideration in order to reduce or eliminate future disagreements about it.
When a Postnuptial Agreement May Be a Good Decision
Nevertheless, for some couples, entering into a postnuptial agreement can be a good decision.
Financial Changes
Let’s say one partner experiences a significant increase in wealth or income during the marriage. That partner may wish to enter into a postnuptial agreement to protect these assets in case the marriage deteriorates.
On the other hand, if one spouse has a considerable amount of debt or a history of financial irresponsibility, the other spouse may want an agreement to protect themselves from being responsible for the debts of the other partner in the event of a divorce.
Older Couples
If one or both parties are elderly and do not plan on remarrying, it is probably a better deal for them financially to stay married and take advantage of their social security and pension rights than it would be if they instead divorced. Divorces can also be very expensive and not worth fighting if a postnuptial agreement at an older age will sufficiently satisfy the parties.
New Marriages
Postnuptial agreements are not just advantageous in the case of a long-term marriage. If the possibility of a divorce arises in the early stages of a marriage, a postnuptial agreement can still be beneficial for some. When parties divorce less than 5 years into a marriage, neither party may be entitled to substantial assets or maintenance. If the parties wish to continue with their marriage without worrying about the possibility of future liability for paying maintenance or a large division of assets should a divorce occur in the future, a postnuptial agreement could be recommended. In such a case, a postnuptial agreement would ensure that any comingling of assets or contributions by either party that happened before the postnuptial could be waived or settled. This would allow the assets to be considered non-marital property.
Couples with Children
Postnuptial agreements can also be helpful for parties who have children. While they cannot be used to decide which parent has primary custody or the amount of child support to be paid, they can still be helpful for parents who want to protect their children. Having children can sometimes prompt one or both parents to reassess the financial arrangements in their marriage, as they may seek to prioritize protecting their children in case of marital fallout.
For example, parents can use a postnuptial agreement to decide each party’s contribution for a child’s college or post-high school education.
Parents could also use a type of agreement to specify that certain assets (such as a savings account or an inheritance) are non-marital and should belong to their children. Another way in which parents can protect their children through a postnuptial agreement could be the allocation of the marital home in the postnuptial. In other words, the parents could agree that one of them, in the case of a divorce, should retain the marital home. This could keep the home as an option for the children to continue to live in or spend time in after a divorce.
Finally, if a parent has children from a prior relationship, a postnuptial agreement can protect those children as well. Drafting a proper postnuptial agreement can protect property and assets a parent intends to leave to their children.
Not only can postnuptial agreements help parents in the manners outlined above, but they can also be a way for parents to settle some of the “big ticket” items in their marriage with less tension than an acrimonious divorce. This can create a more positive environment for the children to grow up in, with their parents establishing a standard for how to resolve conflicts.
Reconciliation
Pre- and post-nuptial agreements can sometimes have a negative connotation. They can, however, be a useful tool in helping a couple establish a stronger connection.
Sometimes, a couple may face difficulties in their marriage that make divorce a real possibility. A postnuptial agreement could be viewed as a way for the couple to rebuild trust while also addressing financial concerns.
Seek Advice from a Family Law Attorney
If you are in the Chicago area, the family law attorneys at Anderson Boback & Marshall can help you determine if a post-nuptial agreement may be right for you. Schedule a free consultation today!
