You’ve Heard of a Prenup, But What is a Postnup?
Many people are familiar with prenuptial agreements, as an agreement entered prior to marriage, designed to protect spouses in the event of a divorce. But what exactly is a postnuptial agreement? The short definition of a postnuptial agreement is a written agreement entered into by spouses after a marriage, defining the division of assets, debts and spousal support in the event of death or dissolution. Essentially it functions just like a prenuptial agreement, but is entered into after marriage. A postnuptial agreement can be entered into anywhere from the day after the marriage to many years down the road.
One essential difference between a prenuptial agreement and a postnuptial agreement is that postnuptial agreements are more heavily scrutinized by the courts for fairness, due to the confidential relationship between spouses. In order to enter a valid postnuptial agreement several requirements must be met:
Written Agreement: The agreement must be written and signed by both spouses.
Voluntarily Signed: The agreement must be entered into freely, without fraud, duress, or coercion.
Full and Fair Financial Disclosure: Both spouses must provide a complete disclosure of all assets, liabilities and income to each other.
Fairness: The agreement must not be “unconscionable”. Florida courts can invalidate an agreement if it is deemed unreasonable or unfair to one spouse.
A postnuptial agreement can extremely beneficial in creating stability and comfort in a marriage, particularly if there have been changed financial circumstances. It can set expectations and help spouses feel more at ease by having honest conversations and working through issues that may cause uncertainty and tension. In some instances a post-nuptial agreement may adequately address marital concerns spouses are facing in order to avoid a divorce.
What can and can’t be included in a postnuptial agreement?
A postnup can help spouses protect premarital assets, to prevent them from becoming marital property. It can address existing debt and establish how alimony will be handled in the event of a divorce. Postnuptial agreements can be particularly helpful if one spouse owns a business and has concerns over keeping the business separate property in the event of a divorce. Both prenuptial and postnuptial agreements can address how future assets will be treated, including assets that increase in value during a marriage.
Florida law does not permit non-financial matters to be included in a postnup. These prohibitions include child support, time sharing, and parental responsibility, which will always be determined based on the best interests of the child.
What information will be needed to get started?
The basic information needed in order to begin the process of formulating a prenuptial or post nuptial agreement is as follows:
A list of all assets (including any real estate, savings, checking and retirement accounts)
A list of all debts (mortgages, loans, credit cards, and business debts)
Most recent account statements
Information regarding income and expenses.
The most important consideration, especially with a postnuptial agreement, is each spouse making a full and fair disclosure to the other. You should consult with an attorney to discuss whether a postnuptial agreement will be beneficial in your unique situation and how the process will work from consultation to signing. Contact Cody Law if you’s like to discuss your options and explore the benefits of a postnuptial or prenuptial agreement.