Most people have heard of a prenuptial agreement, but few may know about a post-nup. However, the use of post-nuptial agreements is “on the rise,” according to a recent survey by the American Academy of Matrimonial Lawyers. Even more surprising is the number of women who are reportedly initiating them. That fact may be another sign that women, their power and their economic awareness are also on the rise.
WHAT EXACTLY IS A POST-NUPTIAL AGREEMENT?
A post-nup is a contract between two married people to settle the ownership rights and interests in the income and assets that have accumulated during the marriage. Sometimes, a post-nup is a great “compromise” between partners who are having real difficulty making decisions in common regarding their finances. Those couples, with the help of lawyers and accountants, can resolve their issues in a written document known as a post-nuptial agreement.
An example would be one spouse who wants to leave everything to a favorite charity while the other spouse would say that he/she must leave everything to the children. A post-nuptial agreement could provide for a current division of certain assets so that each could plan his or her own estate, or it could pose other creative solutions.
Another purpose for a post-nuptial is to “settle” the financial issues overall between parties who find themselves with different attitudes about money, but do not want to divorce over it…they simply want to settle the issues once and for all.
HOW DO POST-NUPTIALS ACTUALLY WORK?
If both parties are fully informed of all of the assets and liabilities, and if each party has his or her own attorney, these agreements can be very helpful in settling disputes over money. The potential problem, of course, is that one partner in the relationship might be much more financially savvy than the other and/or much more powerful, so the weaker of the two clearly needs legal advice, information, and the time to consider all options.
The courts will carefully scrutinize these agreements, when and if they are in dispute, to make sure that the balance of power was not unfairly used to lead the weaker partner into a deal that would “shock the conscience.”
FIVE THINGS TO KNOW WHEN CONSIDERING A POST-NUP
Whether it’s your spouse – or you – who suggests a post-nup, there are some important things to consider.
* First, you each need separate attorneys so that neither one of you is over-powered or legally misled.
* Second, you each need full and complete information regarding all of the assets and liabilities you each have, whether they were accumulated through the sweat of one or both of your brows or inherited, or any combination.
* Third, if done correctly, this document will have legally binding consequences for the rest of your lives and even thereafter if it includes estate planning, so approach it seriously.
* Fourth, whether the document is about saving and improving your relationship or defining and/or preparing to exit the marriage, discussions about money are never easy ones.
* Fifth, you each need to be realistic about the fact that this document may be the divorce settlement and accordingly bargain in good faith but with eyes wide open.
More and more marriages are being recognized as not only a union of hearts and minds, but also as an economic unit. Remember that you and your spouse are truly partners and should treat each other not only with love but also with economic honor.