A postnuptial agreement is completed after a couple marries and like a prenuptial agreement, it can offer protection to both parties in the event of a divorce. It sets out the couple’s intentions for how their assets will be divided.
Reasons for the agreement
Postnuptial agreements are common when there is a change in the couple’s financial circumstances. Sometimes this is because one spouse earns significantly more now than when the couple was married, because one spouse is financially irresponsible or because one spouse becomes a stay-at-home parent and no longer earns an income.
The couple may also decide to complete a postnuptial agreement for business reasons which could include safeguarding a family business that one spouse is part of or to provide protection for the business and its partners.
Also, if the spouses are contemplating divorce, they may decide to use the postnuptial agreement to make the process go faster. The couple can present their agreement to the court and while the court is not required to accept it, it can outline their preferences for spousal support and property division.
The postnuptial agreement must contain certain elements to be effective. It must be in writing, it must not be fraudulent and must be free from misrepresentation. Each party must have equal bargaining power.
Also, it cannot be signed under duress and each party must have a reasonable opportunity to read and understand the document. Both parties must also fully disclose their finances. It cannot include false or incomplete information.
It’s important that a postnuptial agreement is completed correctly so it reflects each party’s wishes. An experienced attorney can help.