Most people have heard of prenuptial agreements, which typically lay out the rules for the division of property and assets before a couple gets married. But there is a different type of setup that has been gaining in popularity over recent years called a postnuptial agreement.
What is a Postnuptial Agreement?
A postnuptial agreement, which is commonly referred to as a post-marital contract, is very similar to a prenuptial agreement, but is actually put into place after a couple has been married as opposed to doing it before. Just like a prenuptial agreement, this type of contract protects one or both parties and clearly states how certain assets will be divided in the event of a divorce or a death of one of the spouses.
A postnuptial agreement is commonly used in states that use a community property statute, which automatically gives the other spouse rights to the assets in the event of a split.
Why are Postnuptial Agreements increasing in popularity?
Postnuptial agreements have been rising due to increasing complexities in relationships, and the need for parties to protect themselves after marriage. A few of the common reasons for needing to set up a postnuptial agreement include:
- Revising an existing prenuptial agreement
- Protect a business that has been established
- Disagreements and fights over finances
- A spouse has been cheating
- Other changes to the family financial picture
Postnuptial agreements are still only a fraction of the agreements that are put into place by married couples, with only 1-2% of marriages having one. However, with additional complexities continuing to rise, and the rate of divorce remaining relatively high, these agreements can certainly make any split down the line much less complicated.