The vast majority of postnuptial agreements have clauses that address property division in the event of a subsequent divorce. These agreements are a vital tool to protect both spouses, and they are beginning to grow in popularity. Here are some ways that a postnuptial agreement could protect both spouses if the marriage ends in divorce.
There are some instances in which married couples feel the need to negotiate and sign a postnuptial agreement. Something may have happened in the marriage that has caused the couple to reassess their relationship. In many cases, one spouse needs additional financial security to remain in the marriage. This usually happens as a result of some crisis in the relationship that threatens its viability. A common precursor to a postnuptial agreement is that one spouse has engaged in infidelity. However, the couple could negotiate a postnuptial agreement for any reason.
The postnuptial agreement will protect the spouse who needs guarantees to stay in the marriage. They need some additional assurances of financial stability that come in the form of an enforceable agreement.
The need is even greater when one of the spouses is wealthy and has a large number of assets. There may be a disparity in this regard, and one spouse may be worried about their standard of living in the event of a divorce. This is even more true when one spouse has remained at home to care for the children.
On the other hand, the postnuptial agreement will also help the other spouse who has the money. They may have brought significant assets into the marriage, and they are worried that they could lose all or a portion of them in the event of a divorce. Alternatively, they may have obtained wealth during the marriage, either through their job or inheritance. These could all be at risk in the event of a divorce. The postnuptial agreement could allow both spouses to leave the marriage as financially whole as possible.
In general, any assets that have been obtained during the marriage would be subject to division in a divorce. If you have started a business during the marriage or have grown your company in that time, your spouse would have a claim to their share of it when marital assets are divided. Even if your business was around before the marriage, the increase in its value is a marital asset and subject to division.
At the same time, the postnuptial protects the other spouse from a bitter court fight over the business. They have the security of knowing ahead of time that they have certain guarantees that will be enforced in a divorce.
As a family lawyer would tell you, a postnuptial agreement also protects your children in the event of a divorce. You will want your children to inherit the assets that you have worked hard to build. However, a divorce could throw a wrench into your estate plan. When you have children from a previous marriage, inheritances become very complicated.
While a prenuptial agreement is the best way to work this out, many couples do not have one, but it is still not too late to get this type of protection. These types of matters can be the subject of a postnuptial agreement, and clauses addressing them could determine the share of assets that your divorced spouse would receive after you die.
The postnuptial agreement also protects spouses who for a variety of reasons did not want to be a party to a prenuptial agreement. Even though family law attorneys in New Jersey and throughout the country have reported that prenuptial agreements are growing in popularity among their clients, many couples will still not even consider them. Whether they do not have assets at the time or think that it is an inappropriate subject to contemplate before a wedding, many couples take their vows without an agreement in place to protect them.
After the marriage, some people realize their mistake and want to get the guarantees they could have gotten from a prenuptial. The good news is that it is not too late if both spouses agree to negotiate. Now that the couple is married, they may feel a little more comfortable discussing these issues with each other. In a marriage routine, the couple could establish communication patterns to allow them to discuss what they were afraid of before.
In addition, the postnuptial protects couples who experienced a significant change in their circumstances during the marriage. There may have been no need for a prenuptial agreement because the pair may not have had any assets to speak of at the time. However, things can often change for the better over time as people move up in their careers or business. Parents could die and leave large amounts of money to their children. However, spouses may be at risk due to changed circumstances. They may consider a postnuptial to give them peace of mind.
Finally, the postnuptial agreement protects spouses who signed a prenuptial agreement years ago but have seen their circumstances change. One could find themselves locked into an agreement that they signed before the couple had many assets. The couple may have now built retirement accounts and home equity, and they may be rethinking the terms of the agreement that they previously had.
The changed circumstances could also include that your prenuptial agreement has expired. Some prenuptial agreements are drafted with a sunset provision that only leaves them in place for a certain period of time. After that time, the assets would be divided by a court in a divorce because there is no effective agreement. A postnuptial agreement would be a way of renewing the prenuptial or negotiating a contract with different terms. Either way, the spouses may find that they cannot afford to be without protection.
While in many cases postnuptial agreements are governed by similar rules to those that apply to prenuptial agreements, they can be harder to enforce in a New Jersey court should a dispute arise. This is because spouses in this state are deemed to have a fiduciary duty to each other, and as a result, the agreement could be thrown out if the court deems that it is not fair or just to one of them. It is essential to see a divorce attorney for the legal advice that you need to negotiate and draft this agreement. Each spouse will need their own family law attorney as a party to an agreement. One divorce lawyer cannot represent both spouses in a postnuptial agreement.
In addition, in order to ensure the protection that you need from a postnuptial agreement, the agreement needs to be fair. It cannot be so one-sided in favor of the spouse who has the assets. Otherwise, the other spouse could challenge this agreement in court as unconscionable, and they may be able to strike down the postnuptial. You should not try to negotiate a postnuptial agreement without the help of an experienced family law attorney because it could end up harming you and giving you an agreement that will not stand up in court.
For advice about a possible postnuptial agreement, contact a family lawyer at Lawrence Law at (908) 645-1000. Our Watchung and Red Bank divorce lawyers could advise you on your legal options and help draft the agreement.
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