6 Reasons Postnuptial Agreements Are Gaining Popularity
A postnuptial agreement is a contract entered into by married couples that provides terms that will govern in the event of death or divorce, including how to divide assets, the relinquishment of certain property rights that spouses would otherwise be entitled to and the terms of spousal support and child support.
- Financial Concerns – A party may learn that his or her spouse has secretly incurred debt that threatens the family’s financial stability. Or one spouse may learn that the other has been hiding a gambling addiction.
- Unequal Assets – A spouse who has made significantly more money than the other spouse may want to secure a higher proportion of the parties’ assets in the event of divorce. Similarly, a spouse who has stepped out of the workforce to raise children, may feel financially insecure due to a lack of retirement savings or reduced earning capacity.
- Second (or Third) Marriages – Oftentimes, spouses who have been married before bring to a new marriage assets that they wish to preserve for children, grandchildren or even parents to whom they feel financially obligated.
- New Inheritance – If one spouse inherits assets during the marriage, those assets will be seen as separate property if they are kept apart from marital funds and remain in the inheriting spouse’s own name. But what if the inheriting spouse wishes to use those assets to help buy a new family home or make another investment that will benefit the family?
- Purchases of Property – Similar to deciding what to do with inherited funds, if a couple uses one party’s funds earned prior to the marriage to purchase or renovate a home, there may be concerns about who gets credit for providing the funds used to purchase the home, whose name will be on the deed, and what may happen to the home should the marriage fail.
- Never Signed a Prenuptial Agreement – Some couples plan to enter into a prenuptial agreement, but either run out of time in which to execute the document before the marriage, or back off of the concept because one or both of the parties is uneasy about it or feeling too much pressure.