Forget the Prenup: Why You May Need a Postnuptial Agreement

People get postnuptial agreements for similar reasons they do prenuptial ones.

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One reason you might consider a post-nuptial agreement is if you are in your second (or third) marriage and have children from a previous marriage. You may want to ensure that some of your assets go to your children. Another possible reason for a postnup is if someone is unfaithful and one partner wants to persuade the other to work on the marriage. Signing a postnuptial agreement with favorable terms to your spouse can show that you are serious about wanting to stay married. Finally, you might want to get a postnuptial agreement if you step out of the workforce to spend a significant amount of time caring for your children and want to ensure you'll be financially secure.

Creating a postnuptial can be costly, because it is recommended that each side hire their own attorney. In the long run, however, it can save a lot of trouble and money if you end up separating. It can also help alleviate concerns about how to re-enter the workforce if you become a single parent, provide settlement in the case of sudden wealth increase, protect your business, help your dependents and even end financial disagreements.

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Talking about money can be challenging and awkward. You may feel like you do not need this type of legal agreement, but nearly everyone has some property worth protecting. A stay-at-home spouse, someone expecting an inheritance, a recently fiscally successful person or joint owners of a business should especially consider the merits of a postnuptial agreement.

Establishing a postnuptial agreement can offer security, but it doesn’t completely guarantee you will avoid challenges, court battles or receiving everything you believe you are entitled to in the event of a separation. Experts tend to agree that a prenuptial agreement is preferable from a legal standpoint and postnuptial agreements may not be enforceable everywhere. It's important to know that ultimately a court could decide not to abide by one.

Whether you move forward with one or not, it’s a good idea to be honest and open in ongoing talks of finances with your partner.

Any opinions expressed in this column are solely those of the author.

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