Prenuptial agreements could help spouses preserve their financial security if a marriage fails. A person with significant assets may enter a second marriage, or even a first, with concerns about losing a great deal of wealth after a divorce. So, a prenuptial contract could provide peace of mind and establish an equitable arrangement during a divorce. What happens if spouses marry and no prenuptial agreement exists? A postnuptial agreement becomes an option.
A postnuptial agreement establishes financial terms
A postnuptial agreement could establish “who gets what” in a divorce. Many assume the agreement only protects the spouse with the most assets, but the other spouse might benefit from the agreement. One spouse may enter the marriage with little or no assets, and the postnuptial agreement would state that spouse receives a substantial amount of money and a house. Remember, a postnuptial agreement refers to a contract with terms and conditions agreed upon by both parties.
If one spouse does not agree to a postnup’s terms, he or she needs may refuse to sign the document. Without a postnuptial agreement, property division would occur after divorce settlement negotiations or a court’s decree.
Notes about postnuptial agreements
Divorce proceedings might prove stressful and costly, while postnuptial agreements may present a viable alternative. Drafting and signing such a contract could reduce tensions in a marriage and, in some cases, make divorce less likely.
Also worth pointing out is that certain actions could invalidate a postnuptial agreement. Threatening or forcing someone to sign the agreement would likely invalidate the contract. Misrepresentation and fraud may undermine a contract entirely. Did a spouse have ample time to read and review the document? If not, it could be legally worthless.