The benefits of postnuptial agreements
Postnuptial agreements allow married couples to decide for themselves how their assets should be divided in the event of a divorce. These documents have always been popular in western states like California where strict community property laws give judges very little discretion. When divorcing couples in California cannot reach an agreement and no prenuptial or postnuptial agreement is in place, judges divide the marital assets equally.
A postnuptial agreement is a contract entered into between spouses that establishes the rules that will be followed should they divorce. Prenuptial agreements are signed before couples marry. While either prenuptial or postnuptial agreements can include provisions dealing with spousal support and property division, they cannot be used to set up child custody and visitation arrangements. In addition to specifying the individual assets each spouse would receive in a divorce, postnuptial agreements can cover the division of retirement accounts, investment portfolios and business interests.
Postnuptial agreements are especially common among married couples who own businesses. Investors and entrepreneurs are all too familiar with community property laws, and they are sometimes reluctant to put time or money into a commercial venture that could change hands in a divorce. A postnuptial agreement could assure them that the day-to-day operation of the business would remain constant even if the financial structure of the company were to change.
Negotiating a postnuptial agreement serves little purpose if the resulting document is unenforceable. To withstand the scrutiny of a family law judge, postnuptial agreements must be entered into willingly and should be basically fair. This is why family law attorneys with experience in this area may urge spouses to negotiate prenuptial or postnuptial agreements in good faith and disclose all of their assets. Legal counsel could also recommend reviewing these documents on a regular basis and making revisions based on changing circumstances.