Let’s face it, financial trouble is one of the top reasons couples divorce today. With the housing market in the dumps, unemployment through the roof and the cost of education skyrocketing it’s been tough for all of us here in the ‘real world.’ When times get tough, marriages get strained.
A prenuptial agreement between Hollywood’s rich and famous often makes headlines, but it has a little known friend; the postnup. This lesser known medium can be a great avenue to salvage shaky marriages.
What is a postnup? It is any written agreement entered into between spouses after they say, “I do.”
Similar to the prenup, the purpose of a postnuptial agreement is to stipulate ownership and division of financial assets in the event a couple divorces.
A couple might seek a postnup for several reasons:
Financial insecurity is undermining the marriage.
You want to provide for dependents from prior marriages.
You didn’t define a financial relationship in a prenup or need to amend your prenup.
You are considering a temporary separation but not a divorce.
One party’s financial circumstances have changed, perhaps through inheritance, promotion, stock options or sale of a business.
You want to specify the division of assets rather than leave it up to the divorce laws of the state possibly saving time, stress and money.
Here is a good example I heard of on the news where a postnup saved a marriage.
The news story was about a couple, fighting constantly over money. The husband’s business debt had burned through inheritance money, and the couple had a first and second mortgage on their house. The wife was in fear of being pushed out of her home, while the husband felt his wife didn’t have confidence in his business. A lawyer was able to help them resolve the situation with a postnuptial agreement in which the house was transferred to the wife’s name, and the couple agreed to split the mortgage and other household expenses. The wife no longer feared losing her home, and the husband no longer felt his wife was undermining his business. The fighting stopped. To quote the wife, “I wanted to divorce his financial problems, not him.”
Another example where a postnup eased the road to recovery was a couple that had separated, however, was not ready to move forward with a divorce. Without any agreements in place, one of the spouses feared that their ‘share’ of the house or estate would not go directly to their children but rather to the other spouse (the children were grown.) The postnup was a valuable tool to ensure the plan was in place and the couple could focus on what was best for the emotional side of the marriage moving forward, rather than the financial.
These contracts are a way to sort out money problems when, for any number of reasons (inheritances, business failures, business successes, winning the lottery, quitting work), there is more or less of it than there used to be. It has also become a popular way to deal with the conflicting obligations that arise in blended families.
Think of a postnup as part of an agreement or estate planning, or as a blueprint that was created in calmer times.
For more information or a consultation on Pre and Postnups and Estate Planning, call the Law Office of Steven B. Chroman at 661-255-1800 or visit www.chromanlaw.com.
This article was originally published in Santa Clarita Magazine as part of our firm’s mission to make family law information more accessible to the Santa Clarita community. Read the full feature and others at santaclaritamagazine.com.