Most people have heard of a prenuptial agreement, which is a legal contract that couples sign before getting married detailing how assets will be divided in the event of a divorce. While it’s not always easy to talk about the “what if” of divorce and financial issues, prenups are an important opportunity to ensure that you and your partner start your marriage on the same (financial) page.
But what happens if you didn’t get a prenuptial agreement in place before you said “I do?”
There are lots of reasons why prenups don’t happen, from a whirlwind courtship to simply not considering the option. If you’ve gotten married and are wondering whether you should take further steps to protect your finances, you may want to consider a postnuptial agreement.
What is a postnuptial agreement?
A postnuptial agreement is a contract similar to a prenup, but it is drawn up only after marriage. While both agreements ensure that spouses have a say in how their assets will be distributed in the event of a divorce, a postnuptial agreement has no deadline. Couples can draft a postnup as soon as one week or several years after their wedding—although, as we’ll discuss below, the longer you wait to have one drafted, the less impactful it may be.
Postnuptial agreements may be personalized to address specific issues that are unique to your relationship.
In general, though, postnups include (but are not limited to) provisions for:
- The division of property
- Debt and liabilities
- Spousal support
- Inheritances and other estate planning considerations
However, a postnuptial agreement may be harder to enforce than a prenup. For this reason, it’s vital that your postnup is carefully drafted and ideally, as close in time to your marriage as possible. An experienced family law attorney can work with you to develop an agreement that protects your best interests.
Three common reasons to get a postnup
If you didn’t sign a prenup, you’re concerned about protecting future assets, and/or your marriage involves children from a previous relationship, you’re not alone. In fact, these are some of the most common reasons married couples seek a postnuptial agreement.
1. You did not get a prenup
Some believe that signing a prenuptial agreement—or even talking about one—is a sign you’re worried about a divorce before you’re even married. This misconception can prevent engaged couples from discussing complex yet important issues.
But when you’re knee-deep in married life, the conversations become harder to avoid.
For example, what if one spouse files for divorce shortly after their partner inherits a large sum of money or has a startup that finally makes it big? What if one spouse has significant existing debt from student loans or credit cards and the other has no debts or liabilities?
Without a postnuptial agreement, it’s likely that all the assets and debts accumulated during the marriage will be divided equitably in accordance with New Jersey statutes. However, a postnuptial agreement can articulate your specific goals and wishes for how assets should be divided ahead of time, rather than waiting until you’re in the midst of a divorce to discuss.
2. You want to protect current and future assets
Whether you came into a marriage with assets—retirement accounts, family heirlooms, property, or business assets, for example—or you acquired them along the way, drafting a postnuptial agreement is a good way to start (or continue) a conversation about what matters to you and your partner, and what would feel fair in the event of divorce.
3. You have children from a previous relationship
Blended families can be complex. Since child custody, child support, and division of assets are often the most contentious part of a divorce, a postnup can make the process more straightforward and civil—especially if your marriage involves a blended family.
For blended families, postnuptial agreements can be useful. You may wish to ensure that your child benefits from an inheritance or receives specific assets, such as family heirlooms or funding for higher education. While estate planning can help support these goals, a postnuptial agreement can play a valuable role in the process by identifying your wishes well in advance.
It’s important to note that postnuptial agreements are intended to address financial and property matters, meaning that they do not include child custody and parenting time arrangements or child support. Instead, postnuptial agreements help parents clarify how and whether their wishes for asset distribution will be carried out in the event of a divorce.
Things to keep in mind when you’re considering a postnuptial agreement
Getting a postnuptial agreement in place may help you avoid significant stress later on (not to mention give you more peace of mind in the present).
For your postnuptial agreement to be considered valid, the following must be true:
- Each spouse has provided full disclosure of their financial and personal circumstances
- Each spouse has individual legal representation
- Neither spouse is agreeing to the postnup’s terms under duress or coercion
- The terms of the postnup would be considered fair and equitable by the court
Steps you can take to help strengthen your postnup
If you’re ready to create a postnuptial agreement or need to amend an existing one, there are several things you can do to make your contract more effective, since these types of agreements are scrutinized heavily by the courts and are vulnerable to attack if not crafted carefully.
Get to know a family law attorney before your wedding
Because family law varies widely between states, it’s important to consult with a family law attorney. Templates downloaded from the internet or contracts created by following a DIY guide may not stand up in court. Moreover, a family law attorney can tell you what to anticipate in the process, from identifying your goals for your agreement to how to gather the right documentation.
While it’s best to start working with a skilled lawyer before you get married, late is better than never.
Identify marital vs. separate property
It’s a good idea to document all of your marital and separate assets so that your postnuptial agreement accounts for everything. Thoroughly documenting your property can help establish a clear baseline for how assets should be divided in the event of a divorce.
What is the difference between marital and separate property, though?
Marital property, also known as community property, refers to the assets or debts a couple accumulates during their marriage. Marital property includes anything that has both spouses’ names on it (property, investments, loans, etc.) and income like salaries, but isn’t limited to just how things are titled. Couples can create marital property interests without meaning to, and those assets are subject to a division in a divorce.
Separate property, on the other hand, is an asset or debt owned by just one spouse. The asset or debt could have either been acquired before marriage or inherited during the marriage. Upon divorce, separate property generally stays with the spouse who owned it prior to marriage. There are many nuances to this, though—and different ways separate property can become marital property—so individual outcomes depend on your specific circumstances.
Design your postnup as soon as possible
It’s recommended to execute a postnuptial agreement as soon after your marriage as possible. While a postnup always has the potential to be amended as your circumstances change, not having one at all could leave you vulnerable in a difficult time.
Work with an experienced New Jersey postnuptial agreement attorney
Navigating a postnuptial agreement can feel tricky, but the outcome can provide you and your partner with peace of mind and a sense of security. However, it’s vital to work with an experienced family law attorney to ensure that you have clear goals for the process and that everything related to a postnuptial agreement is handled carefully and with detail.
At Jacobs Berger, we know how important it is to feel heard when you’ve got questions about legal protections and your marriage. We work closely with clients so we clearly understand their needs before charting a path forward. Ready to get started? Contact our team to coordinate your next steps.