Most people are familiar with prenuptial agreements, which are becoming increasingly common among couples preparing for marriage. However, not many have heard of postnuptial agreements.
What is a postnuptial agreement, and is it appropriate for your marriage?
Planning for the unexpected
A postnuptial agreement, also known as a ‘postnup’, is a legally binding contract entered into by spouses after they are already married. Its primary purpose is to protect each spouse’s separate assets and ensure they remain with their original owner, such as:
- Family heirlooms
- Personal savings
- Businesses owned before the marriage
In addition to assets, a postnup can state that each spouse isn’t responsible for the other’s debts.
Couples can also outline each party’s financial responsibilities within the marriage, including who will pay for what and how to handle joint expenses and savings. And if the couple divorces, a postnup can specify how marital property should be divided. This can prevent disputes and allow for a smoother divorce process.
Another important benefit of creating a postnuptial agreement is that it can ensure that certain assets or property are passed on to children from previous relationships, thus protecting their financial future if one spouse passes away.
For a postnuptial agreement to be legally binding in Rhode Island, it must meet the following criteria:
- Both parties must enter into the agreement voluntarily
- Each party must make a full disclosure of all assets, liabilities, income and expenses
- The agreement must be in writing
- It has to be fair and equitable to both parties
While a postnuptial agreement can seem unromantic, it can actually strengthen a marriage by eliminating uncertainties and potential financial disputes. Working with someone who can review the agreement will help ensure its fairness and validity and protect your interests.