There are instances when people, who should have had prenuptial agreements, wait too long to pull the trigger on getting one.
Is there an option to get an agreement after I say,
“I do”?? My answer is
“yes” but heed my advice before you suggest this on your honeymoon.
Let's start with square one...
Postnuptial agreements, similar to prenuptial agreements, are legal contracts between spouses that outline the division of assets, debts, and financial responsibilities in the event of a separation or divorce. The key difference is that postnuptial agreements are created after the marriage has already taken place. IT CAN ALSO SERVE AS A FOUNDATION FOR ESTATE PLANNING IN SECOND MARRIAGES WHERE BOTH PARTIES ALREADY HAVE CHILDREN.
Understanding the
key
facts about postnuptial agreements can help couples make informed decisions to protect their financial interests and strengthen their relationship.
1. Legal Validity
For a postnuptial agreement to be legally valid in California, it must be in writing, voluntarily signed by both parties, and based on full disclosure of assets and liabilities. One key difffernce with prenups is that once parties are married, they are held to a higher fiduciary standard in dealing with each other. When you are held to a fiduciary standard, you have a legal duty to act in the best interests of another person. Think of it like this: if someone is your fiduciary, they must prioritize your needs and interests above their own.
Essentially, it's about ensuring loyalty and care in the relationship where one person has a significant level of trust in the other.
Because of this higher standard, both spouses should have independent legal representation to ensure the agreement is fair and enforceable.
2. Protection of Individual Assets
Postnuptial agreements
like prenuptials agreements are a way to opt out of the community property law. The Agreement
can protect individual assets acquired before
and during the marriage. This is particularly important if one or both spouses have significant assets, such as property, businesses, or investments, that they wish to keep separate.
3. Debt Management
A postnuptial agreement can outline responsibility for existing and future debts. This can protect one spouse from being held liable for the other's debts, ensuring financial stability for both parties.
4. Clarification of Financial Responsibilities
The agreement can specify each spouse's financial responsibilities during the marriage, including the handling of joint accounts, savings, investments, and expenses. This clarity can help prevent future conflicts and misunderstandings.
5. Spousal Support
Postnuptial agreements can establish terms for spousal support, including the amount and duration of payments, in case of separation or divorce. This provides financial predictability and security for both parties.
6. Changes in Circumstances
Postnuptial agreements can be particularly useful if there are significant changes in circumstances, such as a substantial increase in income, inheritance, or changes in career. The agreement can be updated to reflect these changes and ensure fair treatment.
7. Impact on Estate Planning
As stated above,
A postnuptial agreement can complement estate planning by clarifying the distribution of assets and ensuring that the couple's wishes are respected. This can help prevent disputes among heirs and provide peace of mind.
8. Strengthening the Marriage Creating a postnuptial agreement requires open and honest communication about financial matters, which can strengthen the marriage. By addressing
these
potential issues proactively AND HONESTLY, couples can build a stronger foundation of trust and understanding.
- Changes in Financial Status:
Significant changes in income, assets, or debts can prompt the need for a postnuptial agreement.
- Inheritance or Gifts:
Receiving a substantial inheritance or gift can be a reason to outline its management and protection in a postnuptial agreement.
- Business Ownership:
If one spouse starts a business after marriage, a postnuptial agreement can protect business interests and future growth.
- Marital Issues:
Couples experiencing marital issues may use a postnuptial agreement as a tool to address financial concerns and work towards reconciliation. (NOTE: if things don’t work out, it can provide a foundation for an amicable settlement)
Postnuptial agreements offer valuable protection and clarity for married couples facing changes in their financial situation. Understanding the facts about these agreements can help you make informed decisions to safeguard your financial future.
If you decide this may be a right tool for you,
DONT GO IT ALONE. Contact seasoned family law counsel.
Call: 949-756-0684
Email: dgold@tldlaw.com
Disclaimer
This information outlines a few of the concepts that surround postnuptial agreements in the State of California. It is not intended to be, nor should it be construed as legal advice for any particular situation. Please seek advice from TLD Law or your personal attorney in your state or jurisdiction.
