As anyone who has been married can tell you, things change during a marriage. Financial fortunes improve or decline, spouses develop new interests and habits, career paths diverge, and illness or death may occur.
Such dramatic changes can all effect the status of the marital estate--what property is in it and how it is distributed. As a result, an estate planning tool is needed to account for such dramatic mid-marriage shifts. The post nuptial agreement is that tool.
Like its counterpart the prenuptial agreement, a postnuptial agreement is a contractual relationship between spouses regarding the distribution of property. However, while prenuptial agreements are executed before the marriage and are relatively common, post nuptial agreements are executed during the marriage and are relatively uncommon.
Even though post nuptial agreements (also referred to as mid-marriage agreements), are not as numerous as prenuptial agreements, they are steadily increasing in popularity.
According to a recent survey of members of the American Academy of Matrimonial Lawyers (AAML), about half of all responding attorneys cited an increase in post nuptial agreements during the past five years.
The survey also revealed that the request to create a postnuptial agreement is typically made by both spouses (rather than just one), indicating that it is for the spouses’ mutual interest that a postnuptial is created.
Also, people may shy away from a prenuptial agreement before marriage because they consider it “unromantic” or “pessimistic” to see their future marriage as a business relationship, but after the wedding (and after a few years of marriage) they may have a clearer sense that marriage is about both your emotional and economic health, and that providing for your spouse in case of your death is neither unromantic nor pessimistic.
Most people enter into a post nuptial agreement because the financial status of one or both of the spouses has changed significantly since the wedding day. Like a prenuptial agreement, the postnuptial can:
People also enter into a post nuptial agreement because their goals and priorities have shifted during the marriage. Issues such as child care, household chores, investment decisions, and the like are often made part of the post nuptial agreement, either in response to (or in anticipation of) conflicts and changes of attitude in these areas.
Still, while major changes in one or both spouse's financial status (either increased assets or increased liabilities) is a clear reason to create a postnuptial, the daily "nuts and bolts" of married life should not be neglected in such an agreement.
As with the prenuptial argument, in short, the purpose of the post nuptial agreement is to encourage a harmonious marriage, prevent future conflicts, and build a stronger, more secure relationship and financial situation.
Just as a well-drafted, fair prenuptial agreement can be a very effective estate planning tool, so too can a clear, detailed post nuptial agreement help to distribute property in the event that one spouse dies.
You do not have to have created a prenuptial agreement in order to create a post nuptial agreement.
As with a prenup, a postnuptial is valid only if it is created under two conditions:
1) There must be "full disclosure" between the two parties, in order that there will not be a finding of fraud, misrepresentation, or duress. Both you and your spouse must thoroughly disclose your financial details: income, assets, and liabilities, in the document.
2) Each spouse must individually be represented by separate attorneys prior to signing the agreement, again to reduce the risk of drafting and agreeing to an unfair agreement.
In addition, each spouse must sign the postnuptial agreement, and the agreement must be notarized.
If you live in Michigan and need experienced estate planning help, contact Michael Einheuser for a free consultation. Michael helps families in Bingham Farms, Troy, Farmington Hills, Rochester Hills, Southfield, West Bloomfield Township, Bloomfield Township, and the surrounding Michigan areas.
Schedule your Free Consultation today: (248) 398-4665.Click here to return from the Post Nuptial article to the Home page.