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While couples can sign a prenup before they get married and a “post-nup” after, it’s more than the timing that sets these arrangements apart, experts say.
“It’s a whole different ball game once you’re married,” said Martin Shenkman, estate attorney at Shenkman Law in New York.
“With a prenup, you have no obligation to a spouse,” he explained. “With a post-nup, once you’re married, you have a legal and fiduciary duty to your spouse.”
Shenkman stressed that it’s important to check what your state’s law allows.
When a post-nup might be called
What situations can encourage a couple to prepare a postnuptial contract?
For example, married couples may need to adjust a prenup they signed, according to attorney and certified financial planner Keith Singer, president of Singer Wealth in Boca Raton, Florida. “They want to make sure the new terms are based on things that happened in your life,” he said.
Changes in marital dynamics can trigger a change in the terms of a prenuptial. For example, couples may not have anticipated that one spouse will start earning significantly more than the other, or that as the marriage endures over time, greater trust will grow between the partners, Singer said.
A post-nup can also come into play when a couple is considering a divorce but is still trying to work things out. According to the Centers for Disease Control and Prevention, over 10 years, up to 43% of first marriages may fail.
“Because to divorce earlier [rather] that later might be better for either spouse, their agreement may state that the marriage ends on the post-nup date for the purposes of calculating alimony and dividing property, if efforts to repair a marriage fail,” Singer said. .
There are times when a postnup is needed to override certain state laws to allow one spouse to leave the other unless required by their state.
“Many people don’t realize that once married, state law gives their spouse a minimum percentage of the estate, even if the deceased spouse tried to leave it to someone else,” Singer said. . An example of this case would be a person in a second marriage who intends to leave all of their assets to children from a previous marriage.
How Various Professionals Help With Post-Nups
- Marriage lawyer: knows state laws and drafts the agreement
- Real estate agent: ensures that the plan is consistent with the couple’s estate documents, including trusts
- Financial Advisor: helps the couple with a budget and financial forecast, discusses inherent capital gains, determines what assets should be set aside and how to split accounts, etc.
- Insurance professional: helps the couple choose insurance to meet the needs of the plan
— Martin Shenkman, estate attorney at Shenkman Law in New York
There may also be external forces, such as a future change in wealth, that trigger a post-nup, said CFP Crystal Cox, senior vice president at Wealthspire in Madison, Wisconsin.
In the event of a potential inheritance, for example, an heir – or relatives leaving the assets – may insist on a post-nup so that the wealth remains on their side of the family and is not included in any possible marriage negotiations. divorce. A financial adviser can help by setting up accounts for the heir only, Cox said.
“It’s a lot easier to do that as long as you still have faith in the marriage,” she said.
“A way of communication”
Not all post-nups need to be legal documents. Lili Vasileff, CFP, Certified Divorce Financial Analyst and President of Wealth Protection Management in Greenwich, Connecticut, is a marital mediator who prepares post-nuptial agreements which are private memoranda of understanding.
“Preparing these agreements opens a channel of communication,” she said. “They don’t always lead to divorce, but give couples more time to work through their financial issues.”
There are generally two types of parties that work with Vasileff. The former are spouses with a mature mindset who need to have better communication around finances, especially later in life.
The second type includes spouses who need a way to atone for something that has gone wrong in the marriage. The postnup may aim to remedy the wrong financially, rebuild the relationship, and demonstrate good faith.
Or the agreement may describe how the couple can remain married, but separate financially and become independent of each other’s financial activities.
“It’s a process that takes time, energy and participation…and a tool to learn more about each other,” Vasileff said. “[Post-nups] have been much more in demand lately than in previous years.
“They are less emotionally charged than prenuptials, which are a condition for getting married.”