A postnuptial agreement, or postnup, is a legal contract that spouses enter into after they’re married. It functions similarly to a prenuptial agreement by outlining how assets and debts will be handled if the marriage ends through separation or divorce, although it cannot address spousal support like a prenup might.
The main difference between a postnup vs. prenup is when the document is created. A prenup is written and signed before marriage, while a postnup is signed after marriage.
It may not always be clear whether you are a good candidate for a postnuptial agreement, however. Your financial circumstances will play a role, but there are other factors to consider.
If you have been asking yourself, “Should I get a postnuptial agreement?” one of the best steps you can take is to turn to a family law firm with experienced postnuptial agreement lawyers who can guide you. Learn more about how to know if you are a good candidate for a postnuptial agreement.
Signs That It May Be Time to Reevaluate Your Financial Future Together
Postnuptial agreement candidates can be people who have undergone significant financial shifts. If one spouse receives a substantial amount of money or has an increase in income, or if they have accumulated debt, it would make sense to have a postnup. A postnup can be especially valuable to shield you from your spouse’s unwanted debt
These legally binding contracts outline debts and financial responsibilities while also creating separate property and assets.
When searching for how to know if you are a good candidate for a postnuptial agreement, consider business ownership. If you or your spouse began a business once you were already married, these documents can protect business interests. In the event of a divorce, you would not have to worry about liquidation.
A postnuptial agreement after marriage is a good option for blended families, too. Couples who have children from previous relationships can ensure inheritance rights and align estate plans with the wishes of everyone involved.
Life Events That Often Lead Couples to Consider a Postnuptial Agreement
When should you get a postnup? The answer can vary from family to family, but some instances could prompt these legal agreements.
One is if you or your spouse received a large inheritance, lawsuit settlement, or other financial windfall that you would like kept separate from marital property. When financial circumstances change, having a clear postnup can help protect individual interests.
If one of the spouses is beginning a business, that, too, can mean drafting a postnuptial agreement. Not only does it protect the business, but it can also protect the other spouse from debts if the business doesn’t succeed.
If infidelity or other circumstances have resulted in a loss of trust between the spouses, a postnuptial agreement can help rebuild that trust. It can outline strict financial consequences to future infidelity, for example, or for failing to disclose hidden assets.
Financial Questions Every Couple Should Ask Before Considering a Postnuptial Agreement
When deciding who is a good candidate for a postnuptial agreement, there are some vital financial questions to ask. These questions include:
- How will the marital home be addressed? Who will retain the primary residence, and how will equity be managed?
- What did each party bring into the marriage (premarital assets, savings, real estate, or investments)?
- What estate plans do you have? How can married spouses ensure the prenup aligns with trusts, wills, and other estate planning documents?
- How will future debt and earnings be classified? Do you have a clear idea of who will have certain debt responsibilities and what earnings will be considered marital property?
- Are you on the same page regarding career trajectories? Will one spouse leave the workforce to provide stay-at-home services?
There are many reasons to get a postnuptial agreement, but your unique circumstances will dictate if it is the right move for your family.
Is a Postnuptial Agreement Right for Business Owners or Growing Wealth?
One of the benefits of a postnuptial agreement is that it can assist people who decide to take a chance on a new business. Business owners can maintain control of their business, avoiding the harshness of forced buyouts or ownership issues in the event of divorce.
Even if the business was in place before the marriage, any growth it experiences could be seen as a marital asset. That might not be what you want. Additionally, having a postnuptial agreement can prevent the other spouse from facing liabilities if the business incurs debts.
A postnuptial agreement can also assist in adapting growing wealth to existing estate planning documents. It is helpful in protecting beneficiaries and ensuring future earnings and retirement funds go to the right people if the marital relationship ends.
How Relationship Changes Can Influence Estate and Financial Planning
Who needs a postnuptial agreement? It can be tough to know when everything is going well in the marriage, but changes in the relationship could spark financial disputes if there aren’t legally binding documents in place.
Going through divorce proceedings without the clear separation of assets can complicate estate matters. Former spouses can end up inheriting funds or debts from the other person. Everything can become even more complicated if there are blended or second marriages.
A postnup can ensure that certain assets acquired either before or during the marriage go to the designated people when dealing with a complex family structure.
In certain circumstances, a surviving spouse could have a right to claim assets if you die, regardless of your will. A postnup will help in protecting your beneficiaries.
Questions to Ask Yourself Before Speaking With a Family Law Attorney
As you look into legal counsel to craft a postnup and protect individual assets, there are some questions to ask yourself about your financial expectations. Some questions to consider include:
- Is a postnup right for me and my needs?
- Am I comfortable having honest and collaborative discussions with my spouse about financial reality?
- Do I have a clear idea of what each of our career trajectories looks like?
- Are there business assets that I’d like to protect?
- Are we both going into the agreement voluntarily?
- Am I getting independent legal advice?
- Am I ready to provide full financial disclosure to my spouse?
Having a clear idea of marital property, assets, and debts, as well as the goals you have for the postnup, can help the process.
Common Misconceptions About Who Benefits From a Postnuptial Agreement
When considering a postnup agreement, there are some misconceptions to be aware of. For one, most people assume that these legal documents are only appropriate for wealthy individuals. That is not the case.
Anyone can benefit from having property clearly designated as marital or individual. They can even assist with a simple matter like shared bank accounts if you begin divorce proceedings.
Another misconception is that these legal services are only useful if you’re going through a divorce. These documents have practical value for both spouses during a healthy and happy marriage. They assist with day-to-day financial matters and can prevent many of the disputes that financial uncertainty could prompt.
All too often, these agreements are seen as a punishment for one spouse. However, postnups protect both partners so that no one is stuck with the other person’s debts. They are helpful to the entire family, too, since they can outline child support responsibilities along with property division if the marriage ends.
People also think that postnups protect the wealthiest person in the marriage, but they are highly effective at protecting stay-at-home spouses, as well as those who earn less than their partner. They provide the security that both parties need.
How a North Carolina Family Law Attorney Can Help You Evaluate Your Options
A postnuptial agreement lawyer in NC offers the full support you need as you decide whether a postnup is the right step to take.
They can help you ensure you know all of the postnup legal requirements according to state law, such as making certain the document is in writing, both parties agreed to it voluntarily, there is full financial disclosure, and the document was notarized by a notary, judge, magistrate, or clerk of the court.
It’s important to have individual legal counsel, so you should never share an attorney with your spouse. Your lawyer will fight to protect your rights so that you can get a fair deal out of the postnup.
At Miller Cushing Holladay, our experienced family law attorneys can assist you as you consider whether a postnup is the right next step to take to protect your assets. Contact us to schedule a consultation.
