Most people are familiar with the prenuptial agreement. Couples enter into them in order to outline the distribution of property, assets, and debts in case of the death of one spouse or in case of a divorce. However, few people know much about postnuptial agreements. These documents do the same thing as the prenup, only they are drawn up after the marriage. With a few differences. And for some different reasons. Well, what exactly is a postnuptial agreement?
In Texas, a postnuptial agreement is also referred to as a marital agreement or a petition and exchange agreement. It is especially helpful in Texas, because Texas is a community property state. This means anything acquired after the marriage for the most part belongs to both spouses equally. By utilizing a postnuptial agreement, the spouses have a better idea of what is marital, or community, property, and what is separate property. Specifically, a postnuptial agreement would address:
- How property would be divided in case of divorce
- Which spouse would have the right to control, transfer, or sell property
- Spousal support
- Allocation of funds and division of assets for children from previous marriages
- Details of estate planning
- How a family business would be managed due to divorce or death of a spouse
- Any and all financial matters
One issue they cannot determine is guidelines dealing with child custody or child support.
Postnuptial agreements protect couples in ways that prenuptial agreements can't, dealing with issues that may not occur until after the marriage has been legalized, such as:
- If one spouse begins accumulating excessive debts from such things as gambling
- If the trust in the relationship has been breached, but the couple decided to work it out
- If a spouse receives a large inheritance
- If a spouse wants to start a business
- If a spouse decides to give up their career in order to stay home and take care of the children
- If a spouse makes a substantial purchas, such as a large home
Postnuptial agreements are legally binding documents. However, they must meet specific criteria, or the judge may declare them invalid. The document must meet these requirements:
- Both spouses must be legally capable of entering an agreements
- They must enter into it voluntarily. If either spouse enters into the agreement by fraud or under duress, the judge may declare it invalid.
- They must disclose all assets and debts
- The agreement must be in writing
- The agreement must be signed by both spouses
Just as with the prenuptial agreement, many people feel the postnuptial agreement takes the romance out of a relationship or shows a lack of trust. Some couples, however, feel it provides a sense of relief. Having certain things legally dealt with takes a weight off their shoulders. Worrying about the financial security of your children from a previous marriage could keep you up at night. What will happen to the business you started together if one of you dies before the other? Making sure you are not responsible for the huge debts your spouse is incurring due to out-of-control spending or gambling could also make you breathe easier. Postnuptial agreements work in several different ways to make a relationship better in the long run.
It is a good idea to get the advice of an attorney when you decide to file a postnuptial agreement. It is even recommended that both spouses have their own attorney. Full disclosure is the most important requirement when it comes to a postnuptial agreement, and an attorney can help analyze finances to make sure each has met this requirement completely. They may also walk spouses through the paperwork, avoiding any potential conflicts.