Whys and Wherefores of Postnups

Weary of endless marriage counseling but reluctant to divorce, a small but growing number of couples are trying a new approach to keep their relationships intact, postnuptial agreements. Postnups are increasingly being used in order to deal with a change in financial circumstances, to separate assets and debts for couples who don't agree on every financial move, or even to replace older restrictive agreements as a couple moves to understand that they will indeed spend the rest of their lives together. In fact, some couples have reported that by working through and discussing the provisions of the agreement, they actually strengthened their marriages. They found that they were able to successfully resolve the issues that were straining their relationships. 

Here are a few of the ways that a postnup can be beneficial:

• It can bring peace of mind to a spouse who quits working in order to raise the children.
  
• It can spell out the division of assets to avoid difficulties when it comes to splitting the estate with adult children from a prior marriage.
  
• If there have been marital difficulties, it can end or reduce arguments about money and bring harmony to a troubled marriage.
  
• It can help trigger sweeping behavioral changes that might just keep a couple together.
  

Still, bringing up the topic of a postnup can be difficult. The following suggestions should help you get started:

• Approach the topic from a collaborative viewpoint. For example, if you or your spouse are a stay-at-home parent, focus on the need to address your respective contributions to the relationship.
  
• State your concerns in a straightforward fashion. Be sure to solicit your spouse's input and feedback. Take a break if things start to get tense. 
  
• You should remain open-minded and be prepared to make compromises.
  
• Rather than looking at a postnup as a form of protection, view it as a way to do the right thing when times are good, ensuring that the person you love will be protected in the event that the relationship fails.
  

Don't let a postnup fall to the bottom of your "to do" list. By working through these issues now, you may help head-off more difficult discussions later. Be sure to pick a place and time that will foster openness. And, whatever you do, don't ask for one in the middle of an argument.

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Getting Unstuck With A Postnup - Part 2

Although not as familiar to most people as prenuptial agreements, postnuptial agreements are becoming increasingly common throughout the country. In a recent poll by the American Academy of Matrimonial Lawyers, nearly 50% of attorneys questioned reported an increase in the number of postnups from 2002 to 2007. Interestingly, 58% of the respondents most frequently draw up the agreements as a result of a request made by both parties, rather than it coming from either a husband or wife individually. So what’s it all about?

If there has been full financial disclosure and the terms are not unconscionable, a postnup can be tailored to a couple’s unique circumstances. For example, it can be used to determine who owns or gets to keep which assets, to set a budget for household expenses and savings, or to remove a business from the table in the event of a divorce. Couples also have used them to decide such things as how often the mother-in-law gets to visit, how many boys-only weekends the husband gets to take, pet visitation, and the dividing up of cemetery plots in the event of divorce. There are, of course, limits. Under New York law, postnups can't be used, for instance, to determine questions involving child custody and support. 

Typically, however, postnups address any, some or all of the following subjects pertaining to money and financial issues:

• They describe how marital debts will be paid.
  
• They resolve what will happen to marital property, particularly wit reference to appreciation, gains, income, rentals, dividends, etc.
  
• They decide who will own or occupy the marital residence in the event of death or divorce.
  
• They specify the status of gifts, inheritances, and trusts that either spouse receives, whether before or after marriage.
  
• They clarify what will happen to each type of property, whether jointly or individually owned, such as real estate, artwork and jewelry.
  
• They spell out alimony, or provide for a waiver or property settlement instead of alimony.
  
• They detail death benefits, setting out what will be provided for in each spouse’s will.
  
• They decide on medical, disability, life or long-term-care insurance coverage.
  

Although couples can use a postnup as a roadmap for an eventual divorce, the very process of working through these issues can help save a relationship. “Postnuptial agreements, where valid, can be a good tool for addressing and solving problems spouses might be experiencing in their marriage," said Gaetano Ferro, president of the AAML. “Having a written document with expectations and obligations clearly set forth reduces the areas of disagreement for spouses and can remove a good amount of stress from everyday married life.” 

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Getting Unstuck With A Postnup - Part 1

What with upside down mortgages, jobs on the chopping block, and savings in the tank, it's no wonder that a lot of people are feeling insecure, and maybe a little bit angry too. No doubt, the pressure created by the financial downturn on many marriages has already gotten to the breaking point, and the idea of divorce is starting to sound pretty good to some. 

But, according to a recent article in the New York Times, with nearly one in six homes worth less than the mortgage owed on it, breaking up is getting harder to do. Many spouses are having to put off divorce until better times return. Some hardy souls are even considering the nearly unthinkable: staying together and making their marriage work.

Unfortunately, the sour economy is creating problems for both weak marriages - where spouses are emotionally separated, but legally joined at the hip - as well as for strong ones  - where differing financial preferences, which were previously overlooked, start to become more contentious. 

Many couples who are forced to live together have to face such questions as, who will be responsible for which expenses going forward? who can they leave their assets to in the event of death? and, if a divorce finally does occur, how will whatever is left of the marital property be divided?  These questions don't just disappear by themselves.

This does not mean that nothing can be done to address these issues right now. Married people do have an option: a postnuptial agreement. Like a prenuptial agreement, but entered into during the marriage instead of before, a post-nuptial agreement can provide the security and peace of mind that comes from having definite plan for the future. 

It’s even possible that, by going through the process of discussing and crafting a viable post-nuptial agreement, divorce just might be a little bit less inevitable. 

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