Prenuptial agreements are standard fare these days. With the economy and the rate of divorce being what they are, it's understandable that people would take steps to protect their assets. To that end, many married couples are jumping on the bandwagon and drawing up post-nuptial agreements. Although virtually identical to prenuptial agreement, these contracts are often subjected to more intense scrutiny by the courts and may be more easily invalidated.
Here are a few tips for making sure your post-nuptial agreement is enforceable:
The Legality of Post-nuptial Agreements
For a long time, post-nuptial agreements were not allowed because a married couple was considered a single unit and, thus, could not contract with "itself." However, the increase in the divorce rate and other societal changes has resulted in laws being adjusted to accommodate contracts drawn up between wives and husbands.
Still, the problem many courts have with post nuptial agreements is the reduced bargaining power between the two parties.
With prenuptial agreements, the man or woman can simply walk away from engagement if either party does not like the terms of the contract. This is not the case with post-nuptial agreements, so courts often put these contracts under microscopes to ensure they are fair for both parties. If the judge gets a whiff that the contract is exploitative, he or she may invalidate it and you'll lose all the protection it provided.
Creating a Valid and Enforceable Post-nuptial Agreement
To be valid in most states, a post-nuptial agreement must have all the elements of a contract plus
- All terms must be in writing. No verbal agreements will be enforced.
- Each party must be entering the post-nuptial contract of their own free will.
- Both parties must fully disclose their income and assets to each other.
- It cannot be extremely unjust or one-sided (also known as unconscionable).
- It must be signed and notarized in person by both parties.
It's critical that each person is represented by different attorneys to avoid accusations of bias or coercion. A lawyer can also help ensure the terms of the contract do not violate the law. For instance, you cannot put a clause in the contract about how much money you'll pay in child support or whether your spouse can ask for alimony because these are things that are decided set by the court.
It may also strengthen the validity of the contract if you and your spouse wrote separate notes about why you are choosing to sign the post-nuptial agreement and what the contract means to you. This exercise can help expose any misconceptions or concerns you or your spouse may have that might lead to one of you challenging the validity of the contract in the event of a divorce.
Speaking of separation, you cannot use a post-nuptial agreement as a divorce planning tool. The courts will expect the marriage to continue in good faith after the contract is signed. If there is any indication the agreement was drawn up as a way to protect assets in contemplation of divorce, the judge will likely invalidate it.
However, if you are in the process of separating and you want to make sure your post-nuptial agreement will pass the smell test, consult an experience divorce attorney for assistance.
