A Postnuptial Agreement (sometimes referred to as an After Marriage Agreement or Post Nuptial contract) is a written document signed by parties to a marriage that sets out how they agree to have property divided, spousal support determined, and attorneys fees paid in the future if the marriage ends in divorce.
The big difference between prenuptial agreements and postnuptial agreements concerns the fiduciary or confidential relationship the spouses have to one another, created by the marriage (Family Code §§ 721(b), 1100(c)). Once married, both spouses become a fiduciary to the other. As such, imposed on each spouse is the duty of highest good faith and fair dealing with the other spouse, and neither spouse can take any unfair advantage of the other. Included in this fiduciary relationship is the requirement that both spouses provide the other with full disclosure of any and all information pertaining to issues contained in the agreement. Marital agreements, if challenged at a later date, impose on the spouse defending the agreement a greater burden of proof that the agreement is not unfair to the other spouse. By contrast, there is no fiduciary relationship presumed between prospective spouses, and accordingly, there is no presumption of undue influence created by a fiduciary relationship if a prenuptial agreement is later challenged.
What you need to consider:
In general, you will want to consider and discuss the following with your spouse:
- Discuss all the assets and debts of your relationship as well as future income opportunities.
- Discuss the current financial status of your relationship including spending habits, roles and responsibilities and any concerns you have over money matters.
- Be open and honest about your assumptions and expectations of how property would be handled in the case of death or divorce. Draw up and sign the agreement with the help of two lawyers. It is critical that you are each represented independently to maintain the contracts legal validity.
- Revisit the contract periodically, especially if your lifestyle or financial status changes drastically. If you move to a different state, check to make sure the laws or legal precedents don’t affect the status of your contract.
Why Should a Married Couple Create a Postnuptial Agreement?
Many married couples create postnuptial agreements to help resolve issues in their marriage by removing a source of disagreement over finances, assets, children, chores, etc. Postnuptial agreements are also used by spouses as a way of controlling certain behaviors, such as adultery or over spending.
Another reason to create a postnuptial agreement is if the financial status of either spouse changes after their wedding. Changes in a career, receiving an inheritance, experiencing a change in investment income, selling a business, etc. are all valid reasons to want a postnuptial agreement.
For some couples a postnuptial agreement can stop conflict and promote harmony in their marriage.
***Another type of marital agreement is an immediate separation agreement, where a separating couple may enter into a written agreement providing for an immediate separation and support (child and/or spousal) pending a divorce.
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