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3 occasions when a postnuptial agreement is an excellent idea

On Behalf of | Mar 6, 2020 | Family Law |

Many people marry on an equal financial footing or have few assets and liabilities when they marry, so signing a prenuptial agreement never crosses their mind. Some circumstances that crop up after the wedding may set the financial balance of your relationship askew. 

Here are three reasons why you and your spouse may want to restore financial harmony with a postnuptial agreement:

1. One spouse quits work to manage the household

Leaving your career to support your spouse behind the scenes through household management and/or raising children is a decision with far-reaching consequences. It will deprive you of years of experience in the workplace if you ever decide to step back into a career outside the home. 

You are agreeing to be dependent on your spouse for money, health insurance and retirement benefits. If you and your spouse sign a postnuptial agreement, he or she is providing legal reassurance never to let you down, no matter what happens in your relationship.

2. One spouse joins the family business

A divorcing spouse could put a family-owned business in jeopardy. You can reassure your family by creating a postnuptial agreement that states that your spouse will not come after the business if your relationship ends. 

This is not to say that your spouse would not have a legal right to a portion of your share of the growth in interest that occurs during your marriage. But, the postnup may stipulate that you trade marital assets of the same value during property division rather than giving up shares in the company.

3. One spouse takes out a large loan

Perhaps you or your spouse wants to earn a university degree. In a divorce, the courts divide liabilities as well as assets. When one spouse takes on a significant financial burden, the other could be on the hook for payments, even after a marriage ends. A postnup can clarify that the responsibility for the loan rests with the spouse who incurs it.