Although many people have heard of “prenups” – especially in celebrity marriages – and a few people may be intimate with a “separation agreement” as a result of a divorce, the concept of a Postnuptial Agreement remains elusive. The Postnuptial Agreement is a unique family law tool that can be utilized by current spouses to enter into legally binding contracts.
As noted in North Carolina General Statute Sec.52-10, contracts between spouses are not automatically inconsistent with public policy. Rather, married persons may release or assume certain property rights during the marriage itself. This applies to property rights that may have been acquired as a result of the marriage or property acquired in the future during the marital relationship. Although there are special protections for real property (such as a plot of land, the marital residence, or the vacation home), even large assets such as these can be addressed in a contract between the spouses. Such a contract is legally termed a Postnuptial Agreement.
A Postnuptial Agreement is entered into by spouses who have no intent to end the marriage. So why enter into a Postnuptial Agreement then?
1. Missed the Window for a Prenup (or Premarital Agreement). According to the US Census Bureau, through the 1950s-1980s, the average age for a man to marry was 22-24 years old, and the average age for a woman to marry was 20-22 years old (for their first marriage). As of 2023, the average age for a man to marry is above 30 years old and for a woman is above 28 years old (for their first marriage). By those respective ages, it is common for any marrying person to have entered the work force and created a nest egg of property and assets prior to the date of marriage. As such, the Prenup discussion is much more common today than ever before. However, some of these conversations tend to happen “too late” for the marrying spouses to legitimately enter into a voluntary agreement prior to the wedding date.
As a family law attorney, I generally recommend that a Prenup or Premarital Agreement be signed between prospective spouses no later than 30 days before the date of the wedding. Why? Well for starters, no one wants to be getting the final headcount of guests and outfit alterations while also having to respond to their attorney about different “legal marital rights.” From a timing perspective, I also do not want anyone to feel unduly pressured (or worse threatened) to enter into a legally-binding contract that they are hesitant about signing. If I could speak to every recently engaged couple out there, my advice would be to discuss next steps of pursuing marriage with your family law attorney immediately after engagement (okay, you can tell mom first).
But…I do not want to be the bearer of doom and gloom. If the “prenup discussion” happens a bit closer to the wedding date, the viable option instead of canceling or delaying the wedding ceremony is the Postnuptial Agreement.
Please note: a different set of laws apply to a Postnuptial Agreement as compared to a Prenup/Premarital Agreement. One of the obvious differences is that the spouses can waive spousal support (also commonly referenced to as Alimony) in a Prenup but cannot do so in a Postnuptial Agreement.
2. Unforeseen Financial Ideas or Concerns. Does one spouse have the idea to open a business or make a risky investment that the other spouse is not so “thrilled” about? Or was it the original plan to organize finances in one way right after the wedding date, but that has completely changed due to a life event such as the birth of a child or the death of a loved one? This is where a Postnuptial Agreement between the spouses can come in. A Postnuptial Agreement can help
determine liability exposure as well as financial agreements by the spouses moving forward.
a. A New Business – If a spouse decides to open a new business but the other spouse does not want to be involved or does not want to be financially liable for any debts that may occur, a Postnuptial Agreement can specifically state that the spouse opening the business shall take on sole responsibility and liability in relation to the business. This provides insulation and financial protections to the other spouse.
b. Risky Investment – If both spouses want to make a risky investment but they are a bit hesitant on what to expect (ever heard of Bitcoin?), then the spouses may agree that one spouse takes on the “risk” while insulating the other spouse and the marriage from any loss or harm. If a risky investment ends up failing, then the other spouse can help the investing spouse out of the proverbial hole.
c. Life Events – It could be that children were not in the plan at all, or both spouses were hopeful of having a full sports team of kids. But life may have its own plan. And these life events, expected or unexpected, may have altered the financial considerations and situation of the spouses. Regardless of the life event, if the spouses want to create a clear arrangement on financial circumstances moving forward, then a Postnuptial Agreement can help.
3. Let’s just put it in writing. Maybe nothing has changed and everything is going as planned…and the spouses simply want to formalize agreements in writing to ensure clarity and protection. A Postnuptial Agreement does not have to be complicated or extremely long. Rather, when things are put in writing, there is a document that both spouses can rely upon if things get confusing down the line or things are simply forgotten. We are all humans after all.
Regardless of your specific circumstance, if you are interested in learning more about a Postnuptial Agreement, an experienced, creative family law attorney can help determine if a Postnuptial Agreement may be a fitting solution in your situation.
If you or someone you know wants to learn more about a Postnuptial Agreement, our Modern Legal Team is here to help.
Please note: these educational materials are based on North Carolina law where my legal practice is based. While the insights may have wide applicability, readers should consult with an attorney regarding the specific laws in their state or country.
