A postnup can be negotiated and documented to set out how certain financial (and perhaps other) matters will be handled in the event of a divorce. Often it also specifies how financial matters will be handled henceforth during the marriage. I have helped couples smoothly mediate the terms of their postnup.
Postnuptial agreements, also called postnups, are established after a couple is married. Prenuptial agreements, also called prenups, are established before a couple is married. Postnups are less common than prenups. This is perhaps because many mistakenly assume that if an agreement was not established before marriage, it is too late to do so after marriage.
Creating a Postnup
There are essentially two steps to create a legally enforceable postnup:
- Come up with the agreements themselves and
- Document them appropriately so they are enforceable.
Many assume that you need a lawyer for the first step but you can create the agreements yourselves or with the help of a mediator.
Most couples don’t need a documented postnup. They can fall back on the law and/or negotiate a settlement if their marriage ends in divorce. But for others a postnup agreement can have benefits including:
- Reducing financial ambiguity and uncertainty;
- Providing clear guidelines for financial management; and
- Minimizing financial conflict in the event of divorce.
There can be benefits in working with a skilled mediator rather than an attorney when developing your postnup, including:
- Reduced cost; and
- A warmer, more relaxed process.
Certain guidelines must be followed for a postnup to be enforceable in a divorce or other legal proceeding. Therefore, attorney(s) should be involved when finalizing the documented postnup and before signing it.
California holds spouses to a higher standard than those intending to marry, making postnuptial agreements harder to enforce than prenuptial agreements. Spouses have a fiduciary relationship with one another. That means that each spouse has a duty of the highest good faith and fair dealing toward the other. Therefore, a court will scrutinize a postnuptial agreement much more closely than a prenuptial agreement to be sure that fiduciary standard is upheld. Each spouse must make full disclosure of all financial information concerning the issues addressed in the postnuptial agreement.