Should you consider a postnuptial agreement?

If you missed out on the opportunity to create a prenuptial agreement, don’t assume that there’s nothing you can do to protect yourself. After you get married, you can create a postnuptial agreement, alongside your spouse, so that both of you gain the protection you want during a potential divorce.

Just the same as a prenuptial agreement, you can use a postnuptial agreement to determine how marital property is divided if your marriage ends in divorce. You can create this at any point after you tie the knot.

A postnuptial agreement can help with the following:

  • Protect individual property: For example, if you brought the family home into your marriage and your name is the only one on the deed, you want to protect it from division in the event of divorce.
  • Define marital property: Since you’re already married, you have a clear idea of which assets are individual and which ones are marital. You can define this in your postnuptial agreement, along with terms and conditions for distribution if you divorce.
  • Waive spousal support: It’s not the most common stipulation in a postnuptial agreement, but both individuals could waive the right to receive spousal support. This protects your future income.
  • Protect business interests: For instance, if you’re a business owner, use a postnuptial agreement to protect it in divorce. If you don’t, you could find your soon-to-be ex-spouse claiming that they should be awarded some of your business and/or its assets, such as a business bank account.
  • Protect retirement funds: This is one of the biggest concerns people have in divorce, especially among those who are going down this path later in life. Use a postnuptial agreement to outline what will happen to all retirement funds in divorce. This can include IRAs, 401(k)s and pensions.

If you believe a postnuptial agreement is the right decision for your future, talk to your spouse about creating this legal document. An honest conversation can go a long way in helping you decide what to do next.

If you decide to go down this path, work together to create a mutually beneficial prenuptial agreement.