Is a Postnuptial Agreement a Good Idea?
A postnuptial agreement (or a “postnup”) is very similar to a prenuptial agreement. Both agreements are legally binding contracts between a couple that outline how your assets and affairs will be handled in the event of a divorce. However, a postnuptial agreement is executed and entered into after a couple is married rather than before the union.
Florida is an equitable distribution state, which means that a judge/court will divide marital property equitably not equally. Marital property includes any assets or debts that either spouse acquires during their marriage. In some cases, separate property can be classified as marital property if it was commingled (more on this later). To protect your financial future as well as important assets, you and your partner may consider drafting a postnuptial agreement.
When Should You Consider Drafting a Postnuptial Agreement?
Postnuptial agreements are very beneficial for all couples, regardless of their financial bracket or the length of their marriage. However, postnups can be especially advantageous for couples when:
- Either party is wealthy. If you and/or your spouse have a lot of pre-marital assets or expect to inherit familial assets, a postnuptial agreement can ensure both parties walk away from the union with all of their assets by including what is separate property in your agreement.
- Either party has children from a previous marriage. If either of you has children, you likely have assets you want to leave to them, which is why you should consider drafting a postnup to protect their inheritance.
- Either party received a substantial inheritance. While inheritance is often considered separate (or non-marital) property, it can be subject to division in a divorce if certain assets were commingled. For instance, if one party inherits an income property and the non-inheriting spouse helps with upkeep and financial maintenance of the property, that asset has been commingled. However, with a postnup, the party with the inheritance can protect their asset from division and be advised on how to avoid commingling.
- Either party considered drafting a prenup. A myth surrounding prenuptial (and postnuptial) agreements is that they ruin relationships and indicate a lack of trust between partners, which is why some couples decide not to draft a prenuptial agreement before their big day. However, after you have been married for a while, discussed entering an agreement more, and/or have a better understanding of what terms you would like to agree on, you and your partner can draft a postnup. Having established a marital routine and stronger foundation for your relationship, many couples find drafting a postnup isn’t as awkward or contentious as they envisioned.
- Either party owns a business. Postnups can protect assets you acquired during the marriage, including your business. Without a postnuptial agreement, the business owner risks losing a percentage of their earnings or business shares to their spouse in the event of a divorce. To protect your business in a divorce, you can include terms concerning the business valuation process, the shares the non-owner spouse is entitled to, the division of acquired business debts, and more.
How a Couple Can Benefit from a Postnuptial Agreement
Postnups can benefit married couples because drafting an agreement can help:
- Improve your communication as a couple. Drafting a postnuptial agreement often requires a couple to have tough conversations that you may have avoided previously.
- Settle some financial disagreements. If you and your spouse disagree about how to spend money, make financial investments or plans (i.e. pay off debts, etc.), or other fiscal issues, you will not only be forced to have tough conversations about these issues.
- Protect your financial future. In addition to ensuring your children receive assets intended for them, a postnuptial agreement protects each spouse’s individual interests as you outline who will be responsible for paying debts, how property and assets will be divided, who gets the family pet(s), etc.
- Offer you (and others) peace of mind. Postnups can alleviate some of your uncertainty and stress as it relates to protecting your business or inheritance or being prepared for the future. Entering into a postnuptial agreement can also help family or business associates or investors to feel more at peace concerning their interests in your business or family legacy. Some investors require individuals to have a postnuptial agreement with their partner for this very reason.
- Streamline the divorce process. In the event you and your partner divorce, a postnuptial agreement includes a lot of the information you need to settle in a divorce, which can make the process less time-consuming and stressful. However, the postnup must be legally valid and enforceable, which we will discuss in detail below.
Requirements for a Valid Postnuptial Agreement in Florida
For a postnuptial agreement to be upheld by the courts, it must meet the following requirements outlined under Florida Statute § 732.702:
- Both parties enter the agreement after a fair, complete disclosure of their spouse’s assets, income, and debts.
- Both parties enter the agreement willingly and in the presence of two witnesses.
- The agreement is a written document (i.e. oral postnups are not enforceable or valid).
- The agreement is fair to both parties and does not leave one party in a dangerous financial situation.
- The agreement does not include terms interfering with either parties’ rights as it relates to child support or child custody/visitation.
It is important that you consult with an attorney if you are considering a postnuptial agreement. An experienced family law attorney will have a firm understanding of the laws and can work to ensure that the postnup is enforceable and respectful of both parties’ interests.
How to Discuss a Postnup with Your Partner
If you are worried about how to broach the topic or how to navigate the discussion while you draft the contract, here are some tips for guiding the conversation.
- Be honest about your money history and future. Sharing details about how you view money or want to handle finances in the future can help give your partner insight into why you want a postnup or want certain terms included in your agreement.
- Discuss your individual and shared goals. Remembering your goals or plans for the future can be a great segue for highlighting the benefits of a postnup as well as determining what terms would benefit each party’s goals.
- Enlist the help of a reliable attorney. Retaining an attorney is beneficial as they provide assistance as it relates to ensuring each party feels heard and understood while discussions happen as well as protected in the final agreement.
Contact Our Family Law Firm Today
At Dale L. Bernstein, Chartered Law Office, we are dedicated to helping couples draft postnuptial agreements that are enforceable and protect both parties. Our legal team understands that having these conversations can be difficult and no one wants to feel like they are planning for divorce, which is why we prioritize listening to both parties and ensuring ideas and concerns are framed in a way both parties can receive them.
For help drafting a postnuptial agreement and protecting your assets, contact our family law attorney today at (727) 312-1112 or online.