Postnuptial Agreements Can Improve Marriages

More married couples than ever before are using postnuptial agreements to clarify and resolve financial issues.

What if…?

The COVID-19 pandemic stirred up a host of issues for everyone. In some marriages, as couples spent more time together and had to navigate all sorts of new restrictions, this period magnified relationship dynamics and brought festering questions to the surface. The pandemic created the context and opportunity for couples to have some challenging discussions about the status of everything: their relationship, the future, money, and other questions about property and debt “just in case something happens.”

However, even when we do not have a pandemic to remind us that the future is not within our control, it is natural and healthy for couples to question what could happen if one’s spouse should become ill and die or if the couple faces divorce. In many situations, particularly in marriages with significant imbalances in income and debt, there may be excellent reasons to decide how assets will be divided, “just in case.” This can be accomplished with a postnuptial agreement.

A postnuptial agreement can help

A postnuptial agreement is similar to a prenuptial agreement, except that it is signed after as opposed to before the marriage. A postnuptial agreement may be appropriate for couples who did not have time to complete or failed to consider a prenuptial agreement before getting married or when one spouse receives a financial windfall during the marriage, whether through inheritance, sale of a business, or otherwise.

Couples may use a postnuptial agreement for a variety of reasons: in contemplation of an amicable separation or divorce; to set parameters around a reconciliation; to provide security to a spouse who has agreed to continue the marriage in the face of concerning behavior from the other spouse, such as an affair; to gain clarity about a source of financial conflict, to resolve economic issues threatening the relationship, or to amend a prenuptial agreement where there has been a change in financial circumstances. Conversations about a postnuptial agreement may be difficult but may ultimately strengthen the relationship. In any event, a postnuptial agreement may provide clarity that cannot otherwise be obtained.

Bearing in mind that a postnuptial agreement is a legal document, each spouse should retain an experienced attorney to assist with drafting and review.

It wasn’t always an option

It was only in the 1970s that postnuptial agreements started to gain traction in the United States. Factors that contributed to this acceptance include the increase in divorce during the 1970s and the implementation of “no-fault” divorces — where a married couple could get a divorce without the need for an accusation of misconduct against one or both spouses. In the wake of those changes, postnuptial agreements began to find acceptance in American jurisprudence.

New Hampshire courts lagged behind, and it was not until 2012, in Re Estate of Richard B. Wilbur, No. 2012-368, that the NH Supreme Court recognized the concept of a postnuptial agreement and provided guidance on enforceability. In this ruling, the court noted that “other jurisdictions” that enforce postnuptial agreements require either a “greater showing of fairness than is required of prenuptial agreements” or “analyze both prenuptial and postnuptial agreements under the same standard.” To be enforceable, the agreement can’t be too unbalanced or oppressively unfair to one party or result from a fraudulent action or coercion.

Creating a postnuptial agreement

There are several practical steps that each spouse should take in preparation for drafting, reviewing, and signing a postnuptial agreement.

  • Create a list of any personal or real property brought to the marriage.
  • Create a list of any personal or real property acquired during the marriage.
  • Identify the source of funds used to acquire assets during the marriage.
  • Itemize any substantial gifts or inheritance that you or your spouse received from family, friends, or other sources.
  • Create a list of all liabilities and sources of income.

Couples are encouraged to articulate shared and personal goals for creating the agreement. While a postnuptial agreement does not involve the time constraints of a wedding date, it takes time to consider all the potential provisions and implications of a formal agreement. From a legal perspective, the postnuptial agreement should be evaluated similarly to prenuptial agreements — with an added emphasis on fairness.

If you worry about “what if…?”, a postnuptial agreement could help resolve economic tension in your marriage. Contact the Family Law Group at Orr & Reno to explore your options.

About the Author: Judith A. Fairclough

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