Postnuptial agreements refer to contracts that spouses enter into after marriage, which outline how the ownership of financial assets would be allocated in the event of a termination of their marriage by either divorce or death of one of the spouses. While many people are either unfamiliar with postnuptial agreements or believe that the agreements are only for wealthy people, postnuptial agreements can actually solve a variety of problems for married couples. There are several important pieces of basic information that individuals interested in entering into a postnuptial agreement, including:
- The Type Of Situation In Which Postnuptial Agreements Are Most Commonly Used. The situation in which postnuptial agreements are most commonly used is when spouses find divorce a possibility but are still hopeful that divorce can be avoided. In these types of situations, spouses can occasionally come to agreement about how property should be divided in the event of a divorce. Once these financial issues are resolved, the spouses are able to focus on other types of issues related to the marriage.
- Postnuptial Agreements Are Also An Excellent Idea for Older Clients. Post-nuptial agreements can prove essential when the involved former spouses are older. Rather than divided the marital estate in half or allow a will to determine any number of people for proceeds to go, parties can stay married but continue to live apart and craft a post-nuptial agreement that states that the whichever spouse survives will be provided the remaining marital assets.
- Recent Updates Concerning Postnuptial Agreements in Case Law. Massachusetts courts heard a case in 2010 that addressed post-nuptial agreements. The court ruled that postnuptial agreements have the potential to be binding if a number of requirements are met. This case marked the first time in Massachusetts history that spouses were decided to have the right to enter into postnuptial agreements.
- Requirements for A Postnuptial Agreement To Be Considered Valid. The requirements for a valid postnuptial agreement include five separate elements, all of which must be satisfied:
- the opportunity for each party to select legal counsel of the party’s choosing,
- the absence of fraud or coercion,
- full financial disclosure between the parties prior to the execution of the agreement,
- the parties must knowingly and explicitly waive marital rights and the right to a judicial equitable division of assets in the event of divorce, and
- “fairness and reasonableness” must exist at both the time of execution and time of divorce.
In analyzing these factors, courts also analyze the participation of legal counsel in deciding whether the other four requirements are fulfilled. Without legal representation, parties will have a significantly harder time meeting the requirements for a post-nuptial agreement.