Understanding Postnuptial Agreements and How It Works

To protect inheritance and assets, to protect assets from creditors, to avoid issues and costly legal battles, there are different reasons why couples enter into post nuptial agreements. As the name suggests, postnuptial agreements take place after marriage. The couples are expected to disclose the money they have, the properties they own, any property rights and every other important thing that can impact the marriage. Couples who are willing to go into postnuptial agreements need to know what it entails in order to have the peace of mind when it comes to financial matters in the home. We ask accomplished family lawyer Joe Lemus on postnuptial agreements including what it covers and what it does not. Keep reading!

Understanding Postnuptial Agreements

Many think postnuptial agreements are only for the wealthy. However, it can be beneficial for everyone no matter your socioeconomic background, Joe Lemus explains. This agreement is one of the ways to address different financial and legal concerns that might pop up in a marriage. It allows the couple involved to set rights and responsibilities that they have in the union including how properties or wealth will be divided in cases of divorce or death.

“There are many that have argued against it saying it’s a show of lack of trust or pessimism about the future of the marriage,” Joe Lemus says. However, I always advise that if signing an agreement is crucial to avoid financial issues and bring peace of mind, then, couples should by all means go ahead with it,” he adds.

Postnuptial agreements need to be drafted with careful consideration and legal advice. They must be fair and equitable to both parties and comply with local laws. By entering into a well-structured postnuptial agreement, couples can establish a clear understanding of their financial obligations and protect their assets, fostering a stronger and more secure marriage.

Key Elements of Postnuptial Agreements:

1. Property Division: The most common aspect of postnuptial agreements is the division of property, both existing and acquired during the marriage. This can include real estate, investments, businesses, and personal belongings. Couples can specify how assets will be divided in case of divorce or death.
2. Spousal Support: Postnuptial agreements can address the issue of spousal support. This can include the amount, duration, and triggers for payment. By defining these terms in advance, couples can avoid potential disputes and uncertainties in the event of separation or divorce.
3. Debt Allocation: Couples can also allocate debts between themselves in a postnuptial agreement. This can be particularly important if one spouse has significant debts prior to or during the marriage. By clearly defining who is responsible for which debts, couples can protect their financial interests.
4. Inheritance: Joe Lemus says, Postnuptial agreements can be used to address inheritance issues. For example, a couple may want to ensure that their children from previous marriages inherit specific assets. By outlining these terms in a postnuptial agreement, they can avoid potential conflicts and ensure their wishes are carried out.
5. Pre-existing Assets: If one or both spouses have significant pre-existing assets, a postnuptial agreement can protect those assets in case of divorce. This can be especially important for individuals with substantial wealth or family businesses.
6. Financial Disclosure: Postnuptial agreements often require full financial disclosure from both parties. This ensures that each spouse has a complete understanding of the other’s financial situation and assets.

Why Enter into Postnuptial Agreements:

There are different reasons why couples enter into postnuptial agreements:

• Financial Protection: To protect their assets and inheritance, especially if one spouse has significant wealth or pre-existing assets.

• Clarity and Certainty: To avoid potential disputes and uncertainties in case of divorce or death, providing a clear understanding of financial arrangements.

• Addressing Unique Financial Situations: To address specific financial concerns, such as significant debts, family businesses, or inheritance issues.

• Pre-existing Assets: To protect pre-existing assets from potential division in case of divorce.

• Peace of Mind: To reduce stress and provide peace of mind knowing that their financial affairs are clearly defined.

• Flexibility: To tailor the agreement to meet their specific needs and circumstances, offering flexibility in addressing various financial concerns.

Issues Postnuptial agreement covers and do not cover

Aside from the basic elements listed above, postnuptial agreements also include what happens to marital property incase of death of one spouse or if there is a separation or divorce. This will reduce lengthy court cases, the headaches that come with fighting over who gets what and the financial implications.

However, there are certain issues that postnuptial agreements do not cover and they include:

• Child Custody and Support: Postnuptial agreements generally do not deal with child custody, visitation, or child support arrangements. These matters are typically covered in separate legal documents or court orders.
• Personal Rights: Postnuptial agreements cannot alter or restrict fundamental personal rights, such as the right to vote, marry, or obtain an education.
• Criminal Matters: Postnuptial agreements cannot be used to resolve criminal charges or disputes.
• Public Policy: Postnuptial agreements must comply with public policy and cannot be used to circumvent legal obligations or harm the interests of third parties.
• Future Events: While postnuptial agreements can address anticipated future events, such as the sale of a family business or the inheritance of a significant asset, they

While proceeding for postnuptial agreements, it is important to know that the contract does not substitute open communication and trust within a marriage. If a couple is experiencing significant relationship problems, a postnuptial agreement may not be the solution, Joe Lemus advises. While at it, it’s important to consult with legal professionals to ensure that the agreement is legally sound, fair, and equitable to both parties.