What is a Postnuptial Agreement?
A postnuptial agreement is a written and signed document in which two married spouses agree on multiple issues, including property division, spouse support, and other various personal or financial matters as determined by the husband and wife. A major contrast to a postnuptial agreement is a prenuptial agreement. A prenuptial agreement is signed before the marriage ceremony is performed. A postnuptial agreement will only take effect once the parties are married, distinguishing it from a prenuptial agreement.
The general purpose of a postnuptial agreement is to be a legally binding contract between spouses at a period of time during their marriage. Like any prenuptial agreement, the contract discusses many issues, including property rights, inheritance, and family residence . There is no one-size-fits-all for postnuptial agreements. Each postnuptial agreement will be unique and individualized to the spouses who enter into the document.
As an example, let’s say that John and Mary have been married for over a decade. Due to a variety of reasons, they decide that it is best to draft a postnuptial agreement if they wed. They are happy to have been married and are not planning to divorce; however, John and Mary want to have a legally binding contract that lays out very specific provisions regarding their property rights in the event they do divorce at some point. It would be recommended that John and Mary consult a skilled family law attorney.
Requirements to Make a Postnuptial Agreement in California
For a postnuptial agreement to be valid in California, it must meet certain legal requirements. Every party must provide full and fair disclosure of all material facts and assets. California Family Code Section 1615(e) defines "full disclosure" in the context of a postnuptial agreement as being to both "(1) The basic nature and extent of the [party’s] property, and (2) Any debts or obligations that the [party] may owe to others." The statute also recites the definition of "fair disclosure":
Under California law, different rules apply to enforcement of a postnuptial agreement in divorce proceedings than are likely to apply during a "postseparation" proceeding, which is in essence a litigation after separation, including an action for partition of community property.
Upon termination of marriage or domestic partnership, either spouse or domestic partner may bring an action to enjoin the other from proceeding with the enforcement of the postnuptial agreement. A judgment entered in an action brought by the non-performing spouse or domestic partner renders the postnuptial agreement entirely unenforceable (again, after a full and fair disclosure of all material information).
This is differentiated from an action to enforce a postnuptial agreement that is initiated after the parties separate (i.e., a postseparation enforcement action). In the case of a postseparation action to enforce a postnuptial agreement, the party petitioning the court to enforce the agreement has a lower burden of proof. Persuasive evidence of fraud, duress, or undue influence carried by the moving party is typically sufficient to support a judgment in favor of that party.
Why Do People Make Postnuptial Agreements?
A postnuptial agreement can help preserve a marriage relationship as well as protecting each spouse in the event of a divorce. Therefore, it can be useful in a variety of situations and circumstances. Common reasons we see in our California family law practice include:
Change in Employment If a spouse receives a sizeable bonus, commissions, or stock options as a benefit of employment, a postnuptial agreement allows the recipient spouse to protect and shield those assets from being claimed by the other spouse. In fact, postnuptial agreements signed after a job change may even be court approved as long as certain requirements can be proven.
Purchasing or Selling Real Property A postnuptial agreement can be used to determine who will get what in the event real property is sold.
Incorporating a New Asset into the Marital Estate People often inherit money or property through a family as they’re married. A postnuptial agreement can determine whether or not an inherited asset should be kept separate or be addressed as a marital asset if the marriage should end.
Business Ownership Often times the ownership of a business can be a major issue in a divorce proceeding, largely because spouses don’t want to give up the possession of a business that they own. Addressing the business in a postnuptial agreement can help clarify ownership rights if a divorce occurs.
Trouble in the Marriage As mentioned above, simply addressing a problem in a marriage can sometimes help preserve it. If you have issues with finances, drug or alcohol problems, infidelity, embarrassment, or other problems, working with a lawyer to draft a postnuptial agreement could help clarify your spouse’s position regarding those issues and finally address your concerns about the marriage.
Pros and Cons of Postnuptial Agreements
Advantages and Disadvantages of a Postnuptial Agreement
FAQ 3: What are the advantages and disadvantages of having a postnuptial agreement? The biggest advantage to having a post-nuptial agreement is that you will know with certainty what your rights and obligations are, should the unfortunate happen, and you need to get a divorce. Knowing the rules of the game is vital, very much like an insurance policy provides. To the extent that you blame yourself for the divorce, it is easier to do so, knowing that both of you are equally responsible and will likely walk away from the marriage and divorce equally. This is also true for the spouses of a disabled or mentally ill individual who is believed to be unstable, at times, to provide care to their spouse. Knowing the rules may also bring greater satisfaction to the emotionally disadvantaged spouse, who knows that they were treated either equitably or unequally. Finally, the general psychology of knowing what is in the decision and that no one is getting the short end of the stick offers great comfort. Disadvantages. In 2012, there was a case in Los Angeles, which involved movie star, Christina Applegate, in which a judge found that the prenuptial agreement Applegate had with her husband violated California law, and was unenforceable. The husband in that case received $300,000 as a result of the invalidity. What this goes to show is that just because someone puts pen to paper, does not mean that it is a valid agreement that will be enforceable. If you are in a very abusive relationship, your spouse may use the threat of litigation to force a settlement or extract money from you. The child support schedule you may have seen over the years, which could contain provisions for private schooling, college and even luxury item, may become/indicate a form of indentured servitude. (Not possible when there are children under the age of 18 to be cared for…) In summary, a post-nup or prenup, or an amendment to an existing agreement, as needed, can spot out the rights, obligations, both financial, physical, emotional and legal for parties to consider before filing for divorce. If the terms are acceptable to both parties, then by all means, get an agreement in place. If they are not, walk away.
Common Provisions in California Postnuptial Agreements
As with prenuptial agreements, postnuptial agreements in California may deal with the same core concerns. Thus, customarily, a postnuptial agreement will address such issues as: Sometimes divorcing spouses will be able to work out a settlement of their property and support issues through a postnuptial agreement – and they will want to know right away how in-depth and binding it will be. Will the agreement determine how their property will be divided if they divorce? Will the agreement be enforceable if one of them seeks a divorce? Will the judge be bound by their arrangement? Certain clauses commonly occur in postnuptial agreements, including: Asset division. A postnuptial agreement can outline what assets each spouse will keep if they divorce, as well as who will keep particular pieces of property or money . Key information to be outlined includes a complete inventory of all the couple’s property. Spousal support. Postnuptial agreements may specify alimony amounts, if any, if they divorce. One advantage here is avoiding court-ordered alimony to which the other spouse might object. The agreement also can determine whether spousal support payments can be modified, and to what degree. Debt. If couples accumulate debt while married, their postnuptial agreement may provide for debt division. Additional restrictions. Postnuptial agreements can contain other kinds of restrictions on spouses that might not have been practical to put in pre-nuptial agreements, such as: All of these provisions are subject to state law, so it’s critical to have a clear understanding of what rights and protections you have.
How to Draft a Postnuptial Agreement
Drafting a postnuptial agreement in California is a relatively simple process, particularly if both spouses can approach the matter positively and cooperatively. To that end, each spouse must consult with an independent family law attorney with experience drafting such agreements. In fact, California law requires each spouse to retain an independent attorney who has the following successively important roles:
- (1) ensures that his or her client voluntarily waives the right to spousal support;
- (2) reviews the terms of the agreement with the client, ensuring that the client has thoroughly considered the consequences of executing the agreement; and
- (3) provides a written recommendation that the client execute the agreement.
The attorney is also required to provide the client with a written document highlighting the rights that the client will be relinquishing by entering into the agreement.
The attorney must provide legal advice on each of these matters and provide the client with the written recommendation that the client execute the agreement. In addition, the attorney does not have to practice in the same county as the attorney who represents the other spouse. All of these things must happen prior to a signed disclosure of the rights that the client will be relinquishing by entering into the agreement. Lastly, the law gives those attorneys enforcing the requirements of postnuptial agreements discretion to decide if a particular agreement violates the rules regarding such agreements. If so, the attorney may refuse to certify the agreement, but they are not required to do so (i.e., there is no malpractice liability for violating the rules).
If compliance is guaranteed with the above rules, then the client has the right to sue for breach of contract if the other spouse violates or attempts to avoid the contract.
Challenging a Postnuptial Agreement
Challenging a postnuptial agreement after the fact is possible in California if your spouse can prove that the postnuptial was signed under duress or coercion, or if you did not fully disclose all your assets and the agreement was therefore based on false premises. In this case, it is much like an argument for challenging a premarital agreement.
In a nutshell, duress is extreme pressure to agree and sign a contract you do not really want to sign, for example the threat that your spouse will withhold necessities like food, clothing or shelter until you agree to sign. An example of coercion would be that your spouse has your children and threatens to deprive you of visitation rights if you do not sign.
The lack of full disclosure argument asserts that you "did not understand" what you were signing, because you "didn’t know about" assets or obligations that your spouse had, and therefore agreed to things that are not relevant accurately the things you signed.
Postnuptial Agreement Examples and Sample Cases
One notable case where a postnuptial agreement was used effectively is the high-profile divorce of Jennifer Lopez and Marc Anthony in 2012. While married, the couple signed a postnuptial agreement that outlined how their assets would be divided in the event of divorce. As the marriage unraveled, the agreement became central to negotiations and litigation. However, the agreement was upheld, and the couple settled their financial affairs without extensive litigation.
Another high-profile figure, marital estate attorney Lynn Soodik, wrote in an article about her separation from her long-term partner, psychoanalyst Beth Cohen, whom she had married in Massachusetts. Because California did not recognize same-sex marriage at the time, Soodik and Cohen decided to enter into a postnuptial agreement and a property settlement agreement shortly before leaving Massachusetts in 2010. When California voters passed Proposition 8 in November 2008, which banned same-sex marriage in the state, many same-sex couples reevaluated their family law strategies and created postnuptial agreements to prepare for the unexpected possibility of divorce and child custody disputes.
Soodik and Cohen lived together for more than 20 years and adopted two children. Like most people in long-term relationships, they never expected to separate, but after 25 years of marriage Cohen initiated separation proceedings. Despite having well-drafted legal documents that were valid in another state , the court found that the absence of domestic support obligations conflicted with California law and, therefore, the documents were unenforceable. Soodik writes that the court imposed spousal support obligations on the parties despite the fact that they had made arrangements for the payment without court assistance in their postnuptial agreement.
In a case where traditional prenuptial agreements do not apply, a postnuptial agreement can be an important tool in preparing for divorce in California. California provides a safe harbor for post-nuptial agreements that explicitly waive spousal support. California Family Law Section 1617 provides that a waiver of spousal support in a postnuptial agreement will be deemed valid so long as it "does not promote divorce and is not unconscionable at the time of enforcement."
Dr. Kyra Leibel and Andrew Leibel, both doctors in San Diego, faced a situation not unlike that of Soodik and Cohen. The Leibels decided to divorce and negotiated a voluntary settlement agreement in 2010. The agreement was accepted by the court, and spousal support was waived. In 2014, Dr. Kyra Leibel requested to amend the agreement to provide for spousal support arrears. The trial court found the waiver of spousal support in the settlement agreement was valid. It found that the parties did not engage in fraud and the agreement resulted from equal bargaining power.