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What Is a Postnuptial Agreement, and How Do I Get One?

A postnuptial agreement can protect your assets if you decide to divorce. It's essentially the same as a prenuptial agreement, but it's created after you're already married. If you're interested in creating one, here's what you need to know.

What is a postnuptial agreement?

A postnuptial agreement is similar to a prenuptial agreement in that it's a legally binding contract between two people. The crucial difference is that a postnuptial agreement is made after you're already married, whereas a prenup is made before the wedding. 

A postnup addresses issues such as property division, debt division, and spousal support. Note that not all postnups are the same: Some are much more detailed than others. 

For example, a couple with significant assets may choose to create a detailed postnup covering everything from how their property would be divided in the event of divorce to what would happen to their assets if one spouse were to die. Other couples may choose to create a more basic postnup that simply outlines how their assets would be divided in the event of divorce. 

Read Hello Divorce CEO Erin Levine’s article, Why the Happily Married Couple Should Consider a Postnuptial Agreement

Do I need a postnup?

If you want peace of mind knowing you and your spouse are on the same page about finances, a postnup may be right for you. Ultimately, it's up to you and your spouse to decide whether a postnup is right for your relationship. 

Advantages of creating a postnuptial agreement

Asset protection

If you have significant assets such as a house, business, or investments, you may want to protect those assets should the unthinkable happen. A postnuptial agreement can outline how those assets would be divided, eliminating ambiguity. This can save you time, money, and stress in the long run. 

Financial stability 

Divorce is a messy and emotional process. Having a postnuptial agreement in place can provide some much-needed financial stability during this difficult time. The last thing you want to worry about during a divorce is money. With a postnuptial agreement, you can rest assured that your financial future is secure. 

No court battles

Divorces that go to court are often protracted and expensive affairs. But with a postnuptial agreement in place, you can likely avoid going to court by simply following the terms of the agreement. This saves time and money. 

Peace of mind

Knowing that your assets are protected in the event of a divorce or death can give you peace of mind and allow you to focus on more important things, like your relationship. You know that in the worst-case scenario, your asset distribution has already been decided.

Risks of not establishing a postnup

Too many couples want to assume their marriage will last forever. While that’s a great mindset, the fact remains that roughly half of all marriages end in divorce. 

Preparing for the worst-case scenario is not only prudent, but it can also save money. If you don’t create a postnup, you face several risks.

Your assets may not be protected 

If you don't have a postnuptial agreement and get divorced, your assets will probably be subject to equitable distribution. This means that your assets will be divided fairly between you and your spouse – but it doesn't necessarily mean that they'll be divided equally. 

If you want to make sure you get specific items post-divorce, you need to have a postnuptial agreement in place.

You could end up paying more in taxes than you need to

If you and your spouse combine your incomes and file jointly, you'll likely end up in a higher tax bracket than if you filed separately. This could result in you paying thousands of dollars more in taxes every year. A postnuptial agreement can help protect your finances by outlining how you and your spouse will file your taxes going forward.

You may have difficulty selling property 

If you own property with your spouse and don't have a postnuptial agreement, it can be difficult to sell that property if one of you needs or wants to sell it. Without an agreement in place, both spouses must agree to sell the property and sign off on the sale. This can be difficult if the spouses are no longer on speaking terms. With the right postnuptial agreement in place, however, the property sale simply requires one spouse’s signature.

Your spouse’s poor credit could affect you

If your spouse has poor credit, it could negatively affect your credit score since you jointly hold accounts. This could make it difficult for you to get approved for loans or lines of credit in the future. 

A postnuptial agreement protects your credit by outlining explicitly what would happen to joint accounts in the event of a divorce. For example, the agreement could state that any joint accounts would be closed and that each spouse would be responsible for their own debts going forward.

How much does a postnup cost?

If you’re looking for something simple, you could probably have a postnup drafted for less than $1,000. But if your marital situation is complex and you have lots of assets, you could end up spending more. That said, the cost of a postnup can be well worth it in the end. 

How to talk about a postnup with your spouse

Pick the right time 

Although there will never be a “perfect” time to discuss a postnup, don’t spring it on your spouse out of the blue. Choose a time when you're both relaxed and not preoccupied with other things. You might want to set aside time on a weekend afternoon, for example, or after the kids have gone to bed.

Be direct 

Once you've chosen a time to talk, be direct about what you want to discuss. You might say something like, "I've been thinking we should talk about getting a postnuptial agreement." This way, there's no ambiguity about what you want to discuss.

Explain your reasons 

Your spouse might resist the idea of a postnuptial agreement at first, so it's important that you explain your reasons for wanting one. You might say you just want to be prepared for anything that might happen down the road or that you want to protect your assets in case of divorce or death. Whatever your reasons are, communicate them clearly.

Listen to your spouse's concerns 

Once you've explained your reasons for wanting a postnuptial agreement, listen to your spouse's concerns. They might have valid reasons for not wanting one, and it's important to take those into account. After all, this is a decision that will affect both of you. 

If you want a postnup but need more guidance, the legal experts at Hello Divorce can help. Click to read about our flat-rate postnup preparation service. We tailor each postnup to the terms you both agree upon so you know exactly what you’re getting.