Postnuptial agreements can protect personal assets and interests, address significant life changes and give spouses incentive to work on their marriages.
Many couples are familiar with the benefits of prenuptial agreements, which are contracts that stipulate how various issues will be handled during divorce. Still, it's not uncommon for couples to tie the knot without first drafting one of these agreements. Fortunately for people who are already married, a postnuptial agreement can offer a similar level of protection.
According to ABC News, a postnuptial agreement is a contract that a couple can sign while married. This contract can address several issues of the same issues that a prenuptial agreement would, including division of assets and alimony. Creating a postnuptial agreement also offers various benefits for spouses, starting with the following gains.
1. Protecting personal financial interests
When a divorcing couple cannot agree to a settlement, a family law judge must make decisions about property division, alimony awards and other financial concerns. This may lead to a settlement that neither spouse finds agreeable. Couples that create postnuptial agreements can work together to address various issues that come up during divorce, including:
- What property will be classified as marital or separate
- How marital property and marital debts will be divided
- Whether alimony will be paid
Postnuptial agreements can particularly benefit spouses who have children from past relationships or other dependents to support. A postnuptial agreement can ensure that a spouse receives adequate property or support to provide for his or her dependents.
2. Compensating spouses for life changes
Spouses can also benefit from signing postnuptial agreements before making financial or lifestyle changes that could impact the terms of a divorce settlement. For example, Today recommends that stay-at-home parents protect their interests through postnuptial agreements. These agreements, which can put a formal value on a parent's lost earnings and non-economic contributions, can provide for a financial settlement that reflects both factors.
Other changes that might merit a prenuptial agreement include one spouse funding the other's education or one spouse passing up career opportunities to support the family. In any of these cases, a prenuptial agreement can provide for a spouse to be compensated for his or her financial loss through alimony or a more favorable division of marital property.
3. Showing commitment to the marriage
Postnuptial agreements can also be a useful tool for spouses who want to show their dedication to working on a struggling marriage. ABC News notes that a settlement that favors one spouse could encourage the other spouse to commit to making the marriage work.
Spouses can even use so-called lifestyle clauses to address specific issues within their marriages, such as infidelity, by providing penalties for misconduct. Forbes notes that these clauses are not always legally enforceable. However, these clauses may still be effective in some cases, since spouses may be reluctant to challenge them and make any misconduct a matter of public record.
Creating a valid agreement
In Pennsylvania, postnuptial agreements are enforceable if it is clear that neither spouse signed the agreement under duress or based on fraudulent information. Still, it isn't uncommon for spouses to challenge these agreements at the time of divorce. To ensure that a postnuptial agreement is valid, spouses should consider working with an attorney with experience in this area when drawing up the contract.