What is a Postnuptial Agreement?

Updated on February 21, 2022
Updated: June 19, 2022

For many people, having discussions about money and the potential end of a marriage is uncomfortable at best. However, entering into a contract to protect yourself is a smart move in many ways. If you view marriage as entering into a long-term partnership, then it's essential to build the framework ahead of time. After all, you'd enter into a long-term business relationship without having a legal contract in place.

Unmarried spouses who are trying to establish whether to enter into a prenuptial arrangement or to wait and enter into a postnuptial agreement must give serious consideration to the prenuptial agreement.

Before marriage, if one spouse doesn't like the terms included in the proposed prenuptial agreement and the spouses can't come to an agreement, they can just decide not to get married. However, with a postnuptial agreement, the parties are already legally bound and the couple owes a fiduciary duty to each other.

There may be a concern that the terms in a postnuptial agreement weren't bargained for because one party didn't really have a choice about signing the postnuptial agreement.

What Can be Included in a Postnuptial Agreement?

Besides the basics, there are many issues that most postnuptial agreements address. First, the agreement addresses what happens to marital property in case one spouse dies. 

Secondly, a postnuptial agreement determines certain terms that have been agreed to by both spouses in advance of a legal separation. By agreeing to those terms in advance, both spouses can avoid costly divorce proceedings. The nature of the property, other marital assets, child custody, spousal maintenance, child support, and other legal issues are agreed to by the marital partners upon separation. This part of the postnuptial agreement is typically added to the final divorce decree.

A postnuptial agreement also seeks to determine spouses' rights in a future divorce. These legal agreements address not only marital property; they will also often waive or limit spousal maintenance.

What Cannot be Included in a Postnuptial Agreement?

Matters that aren't enforceable through a postnuptial agreement include potential issues related to child support or child custody. Also, a postnuptial agreement can't attempt to include terms that aim to regulate routine aspects of a marital relationship.

Enforcement of a postnuptial agreement varies by state law. Most family law courts uphold the agreements as long as they’re written, involve a full disclosure of financial information on both sides, and are signed without coercion.

What are the Reasons to Get a Postnuptial Agreement?

Couples may enter into postnuptial agreements for many reasons. It could be because they didn’t get around to entering into a prenuptial agreement before their marriage. With a postnup, they can iron out the same financial matters they wanted to address all along—even after they’ve exchanged vows.

What is a Postnuptial Agreement?

The following are common scenarios where couples might seek a postnuptial agreement.

  • To protect an inheritance. When one of the parties expects a large inheritance, the coupe may want to work out who’s entitled to the inheritance should they split. That’s especially crucial in community property states, where financial assets acquired during the marriage typically are otherwise split equally between the parties. In Illinois, inheritances received by one party during the marriage are typically not considered community property. However, if an inheritance is handled in a way that it's "co-mingled" with community property, then it might be considered as community property. When there’s a postnuptial agreement in place, the agreement may override that equal claim on the inheritance and make sure that the heir continues to own their inheritance. Even in some non-community property states such as Illinois, any increase in the value of the inheritance is deemed marital property.
  • To provide for stay-at-home parents. Stay-at-home spouses who have seen their earning power decline—or parties who want to provide for minor children from a previous marriage—might also see the value of a legal agreement dictating the division of property.
  • Dividing interest in a business. Financial assets such as retirement funds and bank accounts are quite easy to value in a divorce proceeding. However, putting a dollar figure on a business where one or both parties are principals is daunting. Valuing a business is expensive and time-consuming, so some spouses use postnup contracts to categorize the business as separate property that must stay with the title party. The spouses might agree to give the other party a bigger share of non-business assets to make up for it.
  • Repaying gifts. In cases where one party’s parents gave the couple a significant amount of money, for instance, for the down payment on a house—a divorce settlement could be an awkward process. A postnup agreement offers the in-laws the peace of mind that they’ll be reimbursed if the marriage doesn’t last. The postnup agreement may stipulate, for instance, that the party whose family was the source of the money gets the first $150,000 in marital assets to recoup their funds.
  • Rebuilding a relationship. Sometimes having this conversation is seen as a way to save a struggling marriage. Suppose, for instance, that one of the parties has been unfaithful. Agreeing on post-marital terms that are favorable to the other party is a sign of an intention to keep the marriage intact.

What Is Needed to Make a Postnuptial Agreement Valid?

Just like prenups, postnup agreements enable a couple to ease the tension caused by financial affairs. Entering into this type of contract helps spouses to establish an equitable distribution of property if the marriage ends.

Marriage agreements, including postnuptial agreements, often are considered taboo or not in the spirit of companionship. Some people argue such agreements show the couple expects the marriage won't work. However, if the contract can mitigate financial discomfort, the couple may choose to enter into the contract in hopes of making their marriage last.

Although family laws vary from state to state, there are five basic requirements for a postnuptial agreement:

  1. It must be in writing. Oral contracts aren't enforceable.
  2. Both parties must enter into the agreement voluntarily.
  3. It requires a fair and full disclosure of relevant information at the execution time.
  4. Terms mustn't be unjust or unconscionable or one-sided.
  5. Both spouses must sign the postnup agreement

Consult the Reputable Family Law Attorneys at Tommalieh Law

Regardless, if you're trying to enforce, overturn, or draft a prenup agreement the skilled divorce attorneys at Tommalieh Law can help. Our skilled Chicago divorce lawyers have extensive experience drafting and challenging prenup agreements.

Every case is unique, and our extensive experience allows our legal team to cater our legal services to a client’s individual needs. To speak with an experienced Orland Park family lawyer at our divorce law firm, call us today at (708) 232-0017.  

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