What is a Postnuptial Agreement?

What Is a Postnuptial Agreement and Who Should Consider One?

Although divorce is usually the last thing on the minds of happy couples, many marriages end up being dissolved. Prenuptial agreements can provide a framework for the division of assets in the event of divorce, but a couple can create a postnuptial agreement after they’re married as well. At Gross McGinley, LLP, our family law attorneys help clients in Pennsylvania determine the most effective ways to protect themselves and their assets while ensuring these agreements keep everyone’s interests in mind.  

What Is a Postnuptial Agreement?

Like a prenuptial agreement, a postnuptial agreement is a contract between spouses that outlines the division of assets, liabilities, and other financial matters in the event of divorce or death.  A postnuptial agreement is created after marriage and can be a useful tool for any couple to clarify financial matters, make estate planning easier, or streamline the divorce process.

What Should Be Included in a Postnuptial Agreement?

A postnuptial agreement can cover a range of issues, including property division, inheritance rights, management of joint finances, specifying business interests, and defining each person’s financial responsibilities during a marriage.

A postnuptial agreement may also address matters such as spousal support and alimony. However, it’s important to understand that the terms of your postnuptial agreement could usurp the rights you may be entitled to under Pennsylvania law. For example, if you voluntarily sign a postnuptial agreement that waives your right to alimony in a divorce, you may not be entitled to it under the law, even if you contest the agreement. Provisions regarding child custody and support may not be included in a postnuptial agreement in Pennsylvania. Before signing any contract, it’s vital to have an independent family law attorney review it and explain its terms and possible outcomes.

Why a Couple May Consider a Postnuptial Agreement

Various circumstances might prompt a couple to consider a postnuptial agreement, including:

• Changes in financial circumstances: If one or both spouses experience a significant change in financial circumstances during the marriage, they might decide to create a postnuptial agreement to clarify how these assets will be managed or divided in the event of divorce or death. Some common reasons for doing this include receiving a large inheritance, investing in property such as real estate, or starting a successful business.
• Protecting assets: A postnuptial agreement can specify which assets will remain separate and which will be considered marital property in a divorce. This can simplify divorce proceedings, cut down on conflict, and make the process less stressful.
• Safeguarding business interests: If one or both spouses own a business, a postnuptial agreement can outline how the business will be treated in the event of divorce. Addressing issues such as ownership rights, business valuation, and distribution of profits can a help business owner avoid a messy divorce and protect their business interests.
• Clarifying financial responsibilities: Even in healthy, happy relationships, financial conflicts and issues can arise. Clarifying responsibilities such as debt obligations, contributions to joint expenses, or financial arrangements for children from previous relationships helps each person understand their role and offers a framework for healthy communication about financial issues.
• Estate planning: Using a postnuptial agreement as part of your estate planning strategy helps to ensure that your assets are distributed according to your wishes. This is particularly helpful if you have children from previous relationships, want to provide for a disabled family member, or wish to clarify specifics about your estate administration.
• Reconciliation after marital issues: Couples who have experienced marital problems such as infidelity may create a postnuptial agreement to help rebuild trust and provide clarity about financial matters moving forward.

Enforceability of Postnuptial Agreements

The terms of a postnuptial agreement are generally enforceable if they adhere to the requirements of federal and state laws.  It’s also important to note that the enforceability of postnuptial agreements can vary depending on the specific circumstances. To ensure your contract is enforceable, it’s crucial to have a family law attorney draft and review it

Some requirements include:

• Voluntary agreement: Both spouses must enter into the postnuptial agreement voluntarily and without coercion. If a spouse is pressured or forced to sign the agreement, it may not hold up if contested.
• Full disclosure: Both spouses must fully disclose their assets, liabilities, income, and financial obligations to each other. This ensures that each party has complete information about the other’s financial situation before agreeing to the terms of the agreement.
• Fair and reasonable: The terms of the postnuptial agreement must be fair and reasonable. If it is clearly one-sided or leaves a spouse significantly disadvantaged, it may not be enforceable in the event of divorce or death.
• No undue influence or fraud: Both spouses should enter into a prenuptial agreement with a sound mind and free of any undue influence. If an agreement is created under false pretenses or with the intent to perpetrate fraud, it may not be considered valid.

In Pennsylvania, a postnuptial agreement must be in writing, signed by both parties, and properly executed according to the laws of the Commonwealth. Under Pennsylvania law, marital agreements are treated like private business contracts and if it appears that it was an informed, arms-length contract negotiation between the parties, the agreement will usually be upheld.  An experienced family law attorney will ensure that your contract is properly drafted and executed.

Hiring a Family Law Attorney Protects Your Rights

Ultimately, the decision to create a postnuptial agreement depends on a couple’s specific circumstances and priorities. Each spouse should seek independent legal advice to ensure that they fully understand the terms of the agreement and their legal rights and obligations. Seeking the assistance of a seasoned family law attorney in Pennsylvania can protect your interests and help you create an agreement that’s fair and enforceable.

Schedule a Consultation With a Family Law Attorney in Pennsylvania

Gross McGinley, LLP, has provided forward-thinking legal representation to clients in Pennsylvania for more than 40 years. If you need assistance with a postnuptial agreement or other legal matters, contact us or call 610-820-5450 to schedule a consultation. In addition to family law matters, we handle cases involving criminal law, litigation, estate planning, probate, and more.