A prenuptial agreement (also known as a premarital agreement) is an agreement entered into between two parties who are planning to be married. In order to be legal and binding, a prenuptial agreement must be entered into and signed by both parties before the marriage. However, parties who are already married can take advantage of some of the benefits of a prenuptial agreement by entering into an agreement known as a “postnuptial agreement.”
A postnuptial agreement allows spouses to enter into a legally binding contract in which they define their respective property rights in the event of death or divorce. The agreement may be comprehensive and specify how the parties’ assets and debts will be distributed upon death or divorce, or it may only address certain assets or debts, such as specifying that a spouse’s business will be and remain that spouse’s separate property. A postnuptial agreement is sometimes entered into in conjunction with a will or other estate planning.
Some reasons that parties may decide to enter into a postnuptial agreement include the following:
- the parties intended to enter into a prenuptial agreement, but did not do so;
- to ensure that a spouse’s separate property is passed to that spouse’s child or children upon death, rather than being inherited by the other spouse and potentially passed on to stepchildren or in-laws;
- to protect a spouse’s inheritance from any claims by the other spouse;
- to ensure that a spouse’s business or business interest is or remains that spouse’s separate property;
- and to provide a spouse who has lower income or fewer assets with financial security or economic parity.
A primary distinction between a postnuptial agreement and a separation agreement is that the parties to the postnuptial agreement are not entering into the agreement with the intent to separate or divorce. Additionally, a postnuptial agreement cannot waive rights to postseparation support or alimony in the event of separation or divorce. However, a postnuptial agreement can address distribution and ownership of both separate property and marital property which may affect the property that you are entitled to receive if you and your spouse subsequently separate or divorce, or in the event of the death of your spouse.
It is highly recommended that both parties to a postnuptial agreement be represented by separate and independent legal counsel throughout the negotiation and preparation of the agreement to ensure that the agreement is fair and reasonable and that both parties fully understand the terms and legal implications. This can also help to ensure that the agreement complies with applicable laws and is determined to be valid and enforceable in the event it is subsequently challenged by one of the parties.
Daphne Edwards is an experienced family law attorney at Cheshire, Parker, Bryan, and Schneider, one of Wake County’s preeminent law firms. Ms. Edwards limits her practice to the areas of family law and appeals. She provides skilled and focused representation in a wide array of family related legal matters, including consultation, negotiation, and preparation of prenuptial agreements, postnuptial agreements, and separation agreements. She can help you decide if a postnuptial agreement is right for you based on your unique circumstances.