A Brief Introduction About the Postnuptial Agreement
A lot of people have heard about a Prenuptial Agreement, but most people will be surprised to hear that there is a Postnuptial Agreement as well. Postnuptial Agreement is a legal document that is created between a couple who are already married or in some form of civil union. The legal name of the contract is derived from 2 separate words, postnuptial, which means after civil union. A Prenuptial Agreement shares a couple of similarities with a prenuptial agreement, the only difference being, the former is signed after the civil union and or marriage has taken place and the later before.
A Prenuptial Agreement outlines the division and separation of assets between both the parties involved, that is, the husband and the wife, in the event of legal separation between them and or divorce on the basis of whatsoever grounds. This legal document also outlines the details of the amount of spousal support one party is legally required to pay to the other in the case of a divorce and or separation.
Who Takes the Postnuptial Agreement? – People Involved
In a Prenuptial Agreement, there are usually two parties involved, the first being the husband, also known as the legally wedded husband in the marriage, and the second party being the wife, also known as the legally wedded wife in the marriage.
One of the most interesting facts of a Prenuptial Agreement is that both parties need to voluntarily and mutually agree on the creation of this agreement, and it cannot be entrusted to them by either their parents or any other legal guardian.
Purpose of the Postnuptial Agreement – Why Do You Need It?
The purpose of creating a Postnuptial Agreement are many, and it depends from couple to couple. Mentioned below are some of the most common reasons:
- To outline the individual wishes of both parties in the event of a separation, and to make sure each one gets, what is rightfully deserved.
- When a new couple is formed along with a previous inheritance, and the spouse wants to make sure that the inheritance reaches their child no matter what.
- When either of the stakeholders in the agreement has a financial dependency, maybe due to bad spending habits or gambling addiction, which in turn causes a lot of financial problems to the other stakeholders, in this situation, creating a postnuptial agreement will make sure that the stakeholder’s assets are protected under legal grounds.
- If in a certain situation, either of the spouses gets a large financial inheritance and wants to make sure that their assets are protected in the event of a foreseen situations in the future.
- In either of the spouses have decided to stay at home and foster the child, the creation of a postnuptial agreement will make sure that he or she has the available funds to support themselves after a divorce.
The reason for creating a Postnuptial Agreement might vary from couple to couple, but the purpose remains the same in protecting each other’s assets, inheritance, and personal views.
Contents of the Postnuptial Agreement – Inclusions
The contents of a Postnuptial Agreement and Prenuptial Agreement are mostly the same, bearing the fact that the former is entered upon after the couple is legally married to each other and later before the commencement of the marriage. Some of the most significant aspects that go into the contents of a Postnuptial Agreement are,
- The reason why the couple split or decided to go separate ways in the first place.
- How the couple will divide the property among themselves, and other assets if the marriage ends suddenly?
- Whether or not, either of the spouses will support the other by paying spousal support and, if so, for how long.
- In the event that the couple has taken a joint loan or is stakeholders in the same loan, how this amount will be divided, for example, mortgage loans for the house, credit card debt, car loan, and many more as applicable.
- How will the assets be passed along in the event that either of the spouses dies during the process of divorce? This section outlines how the assets are divided, and if the children get the major inheritance or the spouse?
Some other sections of this agreement are as follows.
Parties Involved: In this legal agreement, there are usually two parties involved; the first being the legally wedded husband in the marriage and the second being the legally wedded wife.
Effective Date: This agreement is created after the marriage of the said couple has taken place, and it comes into effect as soon as the couple has been registered into a civil union.
Where does it Apply: This agreement is legally applicable within the boundaries of the state, city, or county where the couple was originally married and where their marriage was legally recognized by a court of law.
How to Draft the Postnuptial Agreement?
There are several aspects you need to consider before a couple can enter into any form of a Postnuptial Agreement, the most significant ones of which have been outlined below.
- Written: A Postnuptial Agreement cannot be entered into just by orally discussing the same between partners. The same has to be written down in a sheet of paper, and both parties need to sign the same to make it legally binding.
- Voluntary: Both parties have a say in the matter of contract creation. No internal or external forces can motivate them to enter into this agreement, and thus, its creation needs to be voluntary.
- Disclosure: Before the contract can be legally created, both parties need to give full disclosure in terms of their total earnings, income, assets, and liabilities. The idea behind the full disclosure is the fact that a Postnuptial Agreement is supposed to spell out assets and liabilities in the event that the marriage comes to an uncertain end, and thus if both the stakeholders do not disclose their assets and liabilities, the same cannot be created.
A Postnuptial Agreement can be drafted by simply following the steps mentioned below.
- Setup a meeting between the couple after the marriage and or civil union has been legally registered in a house of law. Discuss the terms of the contract, how the assets and liabilities will be divided, which party needs to provide spousal support, and, if so, how much spousal support should be provided.
- Once both the parties have mutually agreed to all the terms and conditions, reach out to a lawyer and ask him to draw up a Postnuptial Agreement according to the specifications of the couple. It can be created either from a postnuptial agreement form or, in some cases, you can even opt for a do it yourself postnuptial agreement.
- Get both the parties to sign the contract and get it registered in a house of law, as suggested by your lawyers.
While negotiating the terms and conditions of a Postnuptial Agreement, it is important to keep in mind that when this contract will come into effect, both the parties will no longer be a couple, and therefore individual benefits need to be addressed and taken care of.
Benefits & Drawbacks of the Postnuptial Agreement
The most significant benefits of having a Postnuptial Agreement are as follows.
Benefits of having a Postnuptial Agreement
The contract clearly outlines the individual responsibilities, duties, and limitations and therefore makes sure that both parties are well aware of them at all points in time.
This is document acts as legal proof and thus can be produced in court if there is a need in the future.
Cons of not having a Postnuptial Agreement
In the absence of a Postnuptial Agreement, neither of the parties have legal proof of an understanding taking place between two entities, and thus if the matter is ever brought to court, both parties stand to lose(1).
What Happens in Case of Violation?
In the case of a violation of a Postnuptial Agreement, the same is dissolved, and the parties need to agree to a new set of terms and conditions or come to an understanding between them, of how things will be after the separation has been legally recognized.
Postnuptial Agreement is beneficial to both parties in the event of a separation between them under any circumstances(2), and thus, it is advisable that couples create one for themselves. Otherwise, in the event of a separation, both parties stand to lose.
One of the most important things that both parties need to consider is the fact that although Postnuptial Agreements are legal documents, they are not ironclad, meaning they can be dissolved under certain situations. In certain cases, even if the Postnuptial Agreement meets all the standard criteria for its creation, the court may decide to strike it down under a legal ground.