You may be familiar with prenuptial agreements, which couples can sign before marriage to detail how they would handle their property and assets in a divorce. But if you're already married, it's not too late to outline a similar contract — or to amend a prenup you have in place — with a postnuptial agreement. You can create a postnup anytime during your marriage, even many years after you wed.
Drawing up a postnuptial agreement may be a good idea if there is a shift in the dynamics of your marriage, such as infidelity or a significant change in income, says Steven Goldfeder, partner and co-chair of matrimonial and family law at Blank Rome LLP in New York City. For example, if you or your spouse receives a big inheritance, a postnup can delineate how the assets would be divided in a divorce.
Similarly, if one spouse takes on a lot of debt, a postnup can determine who is responsible for the liability. If you open a business with a person other than your spouse, a postnup can ensure that the business will be treated as separate from your marital property if you get divorced. So if you have to pay spousal support, for instance, it won't impact the business or the co-owner, Goldfeder says.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
If you or your spouse stops working, a postnup can ensure that the stay-at-home spouse will have income following a divorce. However, you can't use a postnuptial agreement to establish rules for child support. Courts have ruled that child support must be dealt with in family court as part of the divorce agreement.
A postnup may also affect how you divide your estate after one of you dies. For example, if you or your spouse has children from a previous marriage in addition to having children together, a postnup may determine how assets are distributed among those heirs.
Because a postnup can be enforced as a contract between you and your spouse, it supersedes the terms of a will and protects assets that you may not want your spouse to inherit that he or she would otherwise have a legal right to claim, Goldfeder says.
Most postnups contain a choice-of-law provision that designates which state's laws apply if, say, you create the postnup in one state and then move to another, says Jill Spielberg, partner-in-charge of matrimonial and family law at Abrams Fensterman LLP in White Plains, N.Y.
For example, if you draw up a postnup in New York, move to California and eventually divorce, you could have assets distributed equitably based on your income and your spouse’s income, following the law in New York, instead of the 50-50 division of assets that California requires, Goldfeder says.
The cost of a postnup
The cost of creating a postnup varies depending on the amount of assets involved and the complexity of the agreement. Family-law attorney fees often range from $400 to $600 an hour, says Goldfeder. But you may pay higher rates if you have multiple assets, such as several homes, major investments or business ownerships.
If your finances are straightforward, you may be able to create a postnup using a site such as LawDepot.com or RocketLawyer.com. Both sites let you compose postnup documents for free with a one-week trial (after the trial period ends, LawDepot charges $35 a month, and RocketLawyer charges $40 monthly).
Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
Related Content
-
I'm 52 with $2.1 in retirement savings: can I afford a second home?Buy a second home now, or wait until retirement? It depends.
-
Should You Switch to a Budget Wireless Carrier? What to Know About Trump Mobile and Other Low-Cost OptionsWith new names like Trump Mobile entering the market, many consumers are curious about affordable wireless plans. Here's how to tell if switching to a budget carrier could actually save you money — and what trade-offs to expect.
-
Should You Switch to a Budget Wireless Carrier? What to Know About Trump Mobile and Other Low-Cost Options
With new names like Trump Mobile entering the market, many consumers are curious about affordable wireless plans. Here's how to tell if switching to a budget carrier could actually save you money — and what trade-offs to expect.
-
Bill Bought a Fridge, and Then His Nightmare BeganA Lowe's customer reached out to me after he encountered the retailer's 48-hour return window for major appliances when his brand-new fridge turned out to be defective.
-
Savvy Marketing Tips for Financial Pros From a Financial ProThese strategies for marketing, client acquisition and retention can help financial professionals elevate their business and production.
-
Taste the Nation: Five James Beard Award–Winning Restaurants Worth Traveling ForFrom coastal kitchens to mountain towns, these celebrated restaurants don't just serve meals — they anchor destination-worthy trips for food lovers.
-
How Much Will Gas Prices Go Up After Iran Conflict?Oil prices jumped after the US strikes on Iran. Should drivers expect prices at the pump to jump, too?
-
Could Trump Accounts be the Best College Savings Option?We compare Trump Accounts to other college savings options.
-
My First $1 Million: Early Retiree, 57, Western North CarolinaEver wonder how someone who's made a million dollars or more did it? Kiplinger's My First $1 Million series uncovers the answers.
-
Blue Collar Workers Add AI to Their ToolboxesThe Kiplinger Letter AI can’t fix a leak or install lighting, but more and more tradespeople are adopting artificial intelligence for back-office work and other tasks.
