Even if you did not sign a prenuptial agreement before your wedding, you and your spouse may benefit from a postnuptial agreement. Contrary to popular myth, these legal documents are not just for individuals who have family wealth to protect.
Explore these common situations in which a postnuptial agreement shields the interests of both partners.
Dividing wealth and inheritance
When one spouse receives significant assets from a deceased family member, a postnuptial agreement can keep the inheritance in the original family in the event of divorce. Otherwise, they may constitute divisible marital assets in a divorce. Property division is also a common concern for those in a second marriage. You can create a postnuptial agreement to establish a fair inheritance plan for children from a previous marriage as well as any children you have with your new spouse.
Providing for a stay-home parent
If you or your partner left the workforce to raise children, the bread-winning spouse likely has a much larger retirement account than the stay-home spouse. In addition, the person without an extended work history will be at a financial disadvantage if the marriage ends. A postnuptial agreement can ensure that both partners can financially survive a divorce by establishing guidelines for asset division and spousal support.
Protecting a business
When you own a business with others, a postnuptial agreement with your spouse can protect your interests in a divorce. Otherwise, the business could fail when any of its partners have to pay a significant settlement to a former spouse.
In addition to these three common scenarios, many couples find that a postnuptial agreement can end long-standing financial conflicts. Having a plan in black and white can often remove the stress and uncertainty, allowing you to truly enjoy your marriage. Couples who have decided to separate can create a postnuptial agreement that lays the groundwork for a fair divorce agreement and smooths the path for a future coparenting relationship where applicable.