Even after saying “I do,” you can still say “I don’t” to some financial moves by signing a postnuptial agreement.
By Brienne Walsh
Millie, a content program about women and money, is licensed from Dotdash Meredith, publisher of Real Simple, InStyle, Investopedia, The Balance and more.
You’re a saver, she’s a spender. You live for dinners out, but hubby prefers exclusively cooking at home. They say they need a new car, but you think the one you have is just fine.
If you find you’re sometimes at odds with your spouse when it comes to finances, you’re not alone.
Studies have found that money is one of the most persistent topics couples fight about. And while love and, yes, financial security, are the most common reasons people get married, financial stress is one of the main reasons couples get divorced.
If money problems only cropped up after the wedding took place, you may be wondering if you should have put something in writing about what will happen if the marriage fails. Enter the postnuptial agreement: a legal document you and your spouse sign after you marry that can establish who gets what in the event of a divorce.
“As far as its structure, a postnuptial is no different than a prenuptial agreement except that it becomes binding upon the signature, not the wedding,” says Benjamin D. Moore, a family and matrimonial lawyer based in New York.
While less common than the prenup, the demand for these kinds of legal documents has been rising. Below, we outline when you should consider getting one—and what it might include.
What is a postnuptial agreement?
Postnuptial agreements are technically any legal document drafted between spouses, explains Alexis L. Cirel, a partner at New York-based law firm Warshaw Burstein. “They can be as narrow or as broad as you want them to be,” she says.
You can use a postnup to establish how you’ll divide up your assets in the event of a separation or divorce. You can also use one to outline financial responsibilities after the marriage ends, like who is responsible for kids’ college costs or paying alimony. Drafting an agreement usually means having to disclose all your assets to each other, if you haven’t already done that.
Why consider a postnup?
Common reasons to draft a postnuptial agreement include:
- Not having had the time before your wedding to finish a prenuptial agreement
- A big change in employment status by either spouse
- A looming inheritance or major purchase, such as real estate
- Infidelity between spouses
- Starting a business
- Concerns about how your inheritance will be divided among your children
As you can see, drafting a postnuptial agreement doesn’t necessarily mean there are major problems in a marriage. Yes, sometimes couples create a postnup as a precursor to divorce, but it can also just be nice to let a legal agreement (rather than emotions) legislate difficult decisions around money if a breakup comes to pass.
“Often, I see couples drafting postnuptial agreements to try to salvage a marriage,” says Moore. If the marriage ends up failing, the postnuptial agreement can help dictate the terms of divorce and make the process much smoother.
What to consider before signing a postnup?
Every state has different matrimonial laws, so familiarize yourself with the ones where you live before going to the trouble of drafting a postnup, explains Cirel. Why? “Sometimes I think people are better off letting the law dictate the terms of an agreement,” she says. Consider that some states might automatically award you a larger percentage of your spouse’s salary than you might have outlined in a postnup.
Another vital thing to do is hire your own lawyer. “It’s important to have separate lawyers to protect your respective interests,” Cirel says.
And finally, be aware that postnuptial agreements are costly. On average, Moore says that he charges between $5,000 and $15,000 for such documents. On the bright side, they can end up saving you money in the long run since, in the event of a divorce, the dispute may be less likely to go to court.
“It’s always a good idea to get your financial affairs in order in a way that you agree on while you are still getting along,” Moore notes.
Brienne Walsh is a writer based in Savannah, Georgia. She contributes to Forbes, Rangefinder and MarketWatch, among other publications.
Three things to do
- Read up on the financial realities of divorce here.
- Check out different ways to get your debt under control.
- Discover everything you need to know to prepare your finances in the event of a divorce.
