Menu
Thomas Cole, Clouds c. 1838 (detail)
Today, more and more people are hearing about postnuptial agreements (also called “marital agreements”). These are binding contracts between spouses that can address issues (mostly financial) that come up after the wedding – but during the marriage – sometimes many years later. They are similar to prenuptial agreements, but entered into during the marriage, rather than before the marriage.
Although most (if not all) states now allow them, they are quite rare, and many factors need to be considered for a couple that is thinking about entering into a postnuptial agreement.
Generally, a postnuptial agreement is entered into when there had been no prenuptial agreement put into place before the marriage. (See below, however, for the “Prenup-Postnup” and the “We-Need-to-Fix our-Prenup Postnup.”) You are already married. You are beyond the start of your marriage where you may have had very little in the way of assets. Now most likely you have real estate and financial assets (and maybe even children!) Circumstances may arise that make you (or one of you) want to set something “in stone” and create your own financial plan, rather than leaving any financial resolutions you may need to address to state law pertaining to marriage, divorce and inheritance.
Courts and legislators worry about postnups. They worry that the terms of the agreement may be patently unfair (when measured against state laws), and that the unfairness will lead to divorce. They are also concerned that the impetus of a postnup is to negotiate better terms than one would otherwise receive in a divorce. These are legitimate concerns, and when negotiating a postnup, they do need to be taken into account. Remember, that a postnuptial agreement is not a divorce agreement – the intent of a postnup is to help alleviate a financial stress on your marriage and to allow it to continue in a more harmonious manner. The challenge is to make sure the agreement serves as divorce prevention rather than precipitating divorce.
Case studies of typical reasons spouses may want a postnup include the following:
As you may surmise, thinking about these issues and trying to balance all the considerations and risks involved in order to address them might be quite difficult and raise sensitive, painful issues. That’s why the process might best be started by working with a mediator to figure out how the terms of the postnup may help your situation.
The “Prenup-Postnup.” This circumstance occurs quite a bit. The couple intended to get a prenup, and started working on it before their marriage. They may have gotten pretty far, but they were unable to finish it before the wedding. After the wedding (after taking some breathing time) they completed it. Now it is a postnuptial agreement rather than a prenuptial agreement.
The “We-Need-to-Fix our-Prenup Postnup.” Sometimes prenuptial agreements are done in a hurry, and the terms need to be adjusted or modified. Other times a couple did get a prenup, but it had terms that were highly offensive to one or both of the spouses. They now want to fix it. Another reason to “fix” a prenup may be that there are anniversary dates pertaining to the vesting of certain assets or other financial triggers, which the couple may now wish to adjust.
In general, the standard threshold for financially taking care of each other when entering into a prenuptial agreement can be quite low, even skimpy. This is true, even though most people are generous and thoughtful about the future needs of their spouse when entering into a prenuptial agreement.
With a postnuptial agreement, because people are already married, courts will generally apply thoughtful legal analyses as to whether the postnuptial agreement should be enforced. Postnups have more limitations than prenups. That’s why it is important to have separate legal counsel when you draft the postnup, although the first step can be through mediation. Your counsel will have the expertise to guide you through solutions that will be legally binding taking into account your circumstances.
Mediation is an optimal way to begin the process of thinking about entering into a postnup and the terms that it should contain. In this way, you and your spouse will be discussing the difficult issues that are bringing you into conflict. You will be discussing sensitive issues face-to-face, but will be doing so in a safe place with the trained neutral mediator who is expert in facilitating delicate issues. This is often the optimal first step in the postnup process.
The mediator should be an attorney well-versed in estate law, divorce law and, if an ongoing business is involved, with business law. With the help of the mediator, you and your spouse can formulate a term sheet which will set forth the terms that you would like to include in your postnup. It is important that the negotiations between you as a couple be handled sensitively with an understanding of all implications, legal and otherwise, that will flow from the potential decisions you are making about your future.
To read a primer on the laws of postnuptial agreements in Massachusetts and nationwide, Ansin v. Craven-Ansin, a Massachusetts case provides a detailed discussion of the laws and the concerns when drafting postnuptial agreements. [http://masscases.com/cases/sjc/457/457mass283.html] Although postnuptial agreement laws and enforceability standards vary from state-to-state, the Ansin case is probably the most complete discussion, and is cited in many cases nationwide.
Laurie Israel is experienced as both an attorney and a mediator in helping clients think about and formulate postnuptial agreements. She represents clients in Massachusetts as an attorney, and mediates and consults on postnups nationwide.
Laurie Israel began her practice of law as a tax lawyer over 35 years ago. She is admitted to the bar in the Commonwealth of Massachusetts, and is also admitted to practice in Federal courts, including the Supreme Court of the United States. She is a Martindale-Hubbell AV Preeminent Attorney®.
Over the years, her practice of estate planning and divorce led her to an interest and concentration in prenuptial agreements. She has become one of the preeminent national experts on prenuptial agreements, and has been a presenter to conferences on the topic of prenuptial agreements and mediating prenuptial agreements nationwide.
Laurie has written a comprehensive book on prenups, “The Generous Prenup: How to Support Your Marriage and Avoid the Pitfalls” (Amazon). This book was written with the laperson in mind, but is also used by attorneys and mediators as a comprehensive and fair-minded guide to this often thorny topic.
Laurie now confines her practice to prenuptial and postnuptial agreements. She helps people by mediating and consulting about prenups all over the country, as well as representing clients in Massachusetts.
To contact Laurie Israel, email her at laurie@laurieisrael.com, or use the contact page.