As a practicing New York matrimonial and family law attorney, I have observed a huge increase in couples signing both prenuptial and postnuptial agreements. While couples certainly think about love, building a family and a life together, they may also recall their parents and/or other family members having to litigate their divorce. They may recall the length of time and amount of resources expended during a family divorce and want to avoid this in their future. For some people, discussions about prenuptial agreements can seem like the antithesis of being in love. For others, it is the fact that they are in love that causes them to want to be totally transparent about financial issues and to have these very important conversations as they plan for their lives together. Priorities may change as couples evolve in their professional and family lives. Many times, a client who retains me to draft a postnuptial agreement tells me that they wanted to sign a prenuptial agreement but ran out of time or couldn’t quite agree on the terms but committed to enter into a postnuptial agreement after the wedding.
While the time crunch may cause couples not to sign their prenuptial agreement, it does not mean that they have to forgo the concept of creating their own binding marital contract. In New York, if you missed the opportunity to sign a prenuptial agreement, you still can plan for your financial future together by entering into an agreement after the marriage– it’s called a postnuptial agreement—often just called a postnup.
What is a Postnup?
A postnup agreement is a legally binding contract between spouses created after marriage. It usually addresses financial issues such as property division, responsibility for debts, spousal support, estate rights, life insurance, who gets the marital home and other issues. If there are children, it may even address support and custody, although those issues may be subject to a later review by a court in the event of a divorce.
Essentially, a postnup is your personal marriage contract that will be a road map for your future and in the event that your marriage ends. Remember, if you have married, you already have the New York State marriage contract—it is the automatic rights and obligations that you and your partner receive on the day you say “I do”. A postnuptial agreement is an opportunity to craft your own marital contract.
By the time most couples are ready to enter into a postnuptial agreement, the wedding stresses are in the rear-view mirror. Couples can now focus on building their lives together including their financial partnership. As a postnup can bring security to a marriage, it can also bring comfort and romance. It is a tool to enhance the marriage.
Why Should You Create a Postnup
There are so many good reasons. Here are a few of the most common that I have observed in my New York family law practice:
You intended on entering into a prenup and there was a time crunch that couldn’t be avoided.
The wedding came faster than you thought and the prenup took longer than you expected. Rather than stressing about it, you and your spouse chose to focus on the wedding, put the prenup on hold and circle back to this later when you were in a less stressful situation. A postnup resolves this issue.
You or Your spouse’s finances changed.
There was an unexpected change in career or employment, someone is returning to school, a receipt of RSUs or you or your spouse just learned about an inheritance. As a result, the financial road map changed and it seemed better to discuss and address this new financial structure. A postnup helps clarify financial expectations to avoid misunderstandings later.
One Spouse is Devoting Their Time to Supporting the Family At Home and Leaving Their Employment Opportunities.
If you spouse places their career on hold to stay at home with the children or support the other spouse so that the other spouse can focus on their career, then that stay at home parent should be protected financially. A postnup can solve this issue and make sure that both spouses are able to plan for their financial future.
You combined accounts or property.
Sometimes one or both spouses come into the marriage with premarital property. They wish to protect that property while purchasing a home together or maintaining joint accounts. They want to be sure of what occurs if funds become mixed and delineate separate versus marital property. They want to figure out in advance what happens to commingled monies before it becomes too difficult to trace what is separate and what is marital property. A postnup clarifies that.
You’re rebuilding trust.
Let’s face it—marriage can have its difficult moments. There may be breaches of trust, secrets uncovered, infidelity and other issues that arise. A postnup can place your marriage back on track by creating financial transparency and accountability. It can provide security and reassurance during a tumultuous time in the marriage.
What New York Law Requires
In New York, a postnuptial agreement must be:
- In writing
- Signed and acknowledged in the presence of a notary by both spouses in the same form as required to file a deed in New York State; if this is not done properly, the postnup will be null and void
- Entered into voluntarily, without duress
- Based on accurate and full financial disclosure
Each spouse should have their own lawyer represent them in the negotiation of the postnuptial agreement. This is to avoid an agreement being one-sided or unconscionable and to ensure that each party understands the terms of the agreement. Courts in New York prefer if both parties are represented and had the opportunity to consult with their respective counsel.
Why a Postnup Can Enhance a Marriage
It is often difficult for couples to have discussions about money. One party may have less financial acumen or a party who is the lower earner may feel guilty for asserting their position. There is no question that having money conversations is one of the hardest topics for couples to discuss. However, having discussions about financial matters allows for greater transparency and a marriage based upon honest discussions. That is true whether you have millions of dollars or are just starting to build your fortune. Talking about finances is critical to building a marriage of respect and trust.
I often see couples feel less anxious after finalizing their postnup. Having had the difficult conversations, they feel that they can now focus on their family, career, health issues and most importantly their relationship.
In my view as an attorney, the ability to have these honest and open conversations is critical to building a solid marriage.
The Benefits of Planning Ahead
A postnup agreement can help in so many ways. It can aid in:
- Preventing future legal disputes during a divorce or nullification of a marriage
- Provide support and clarification for estate planning purposes
- Protect your children’s financial future including those children born from prior relationships
- Preserve business interests and inheritances
For high-net-worth individuals or professionals in New York, postnuptial agreements allow you to sleep peacefully at night and focus on your career and the building of your family and fortune. Postnups equal peace of mind. And for any couple, postnups deliver financial honesty that keep financial stress from eroding a marriage.
If you never signed a prenup, or if your financial life looks different now than it did on your wedding day, a postnup may be the perfect next step. Every couple should strive for clarity and peace of mind, no matter when they start the conversation.
Lisa Zeiderman, Esq., CFL, CFLA, is a New York family law attorney concentrating on divorce, custody, and financial matters.