Ask the Experts: What is a postnuptial agreement?

A postnuptial agreement is a legally binding contract between a husband and wife. It’s similar to a prenuptial agreement, but it’s signed during the marriage, not before. Its primary purpose is to stipulate ownership and distribution of assets in the event of a divorce.

There are many reasons married couples sign a “postnup.” Some couples create one because they failed to sign a prenup, or because they want to amend their prenup. Further, some prenups have sunset provisions, meaning that they expire after a specified number of years, and some couples use a postnup to renew their prenup protections.

Sometimes, a postnup is used because there has been a significant change in the financial condition of one of the spouses, perhaps through a promotion, career change, inheritance, or sale of a business. This spouse may want to protect the wealth earned by the sweat of his or her own brow. Or, the other spouse may feel threatened by the inequity and desires financial security, which can be provided for in a postnup.

Still other couples use a postnup to resolve issues, stop conflict, and promote harmony in a troubled marriage. Provisions in this kind of postnup might include how often the in-laws can visit, who does certain chores, and where vacations will be taken.

Though postnups serve the same purpose as prenups, courts tend to scrutinize them more carefully, holding them to a higher standard of fairness. This is because the parties are married and thus in a fiduciary relationship with each other. It’s also more likely that coercion or duress may have been involved. Because of this, it’s important that:

Each spouse hire a separate and independent lawyer
There be full disclosure of all financial information
The terms be fair and equitable
There is no coercion or duress involved