There are a number of reasons why you may decide you need to revise a prenuptial agreement or to create a postnuptial or marital property agreement, if there was no premarital agreement. The fact that you might be considering divorce is only one possible reason.
Motivations for developing a postmarital agreement may include:
- One or both partners are considering the possibility of divorce but not yet ready to end the marriage. In some cases, having a solid postmarital or marital property agreement may actually ease financial stress and anxiety, thereby resolving some of the problems that are making life together difficult.
- One partner may want to shield the other from creditors or potential malpractice suits by transferring property.
- The marital estate may have changed dramatically since the marriage and/or the prenuptial agreement. Assets may have increased or decreased in value. You and your spouse may have worked together to enhance an asset, such as a family business. Who will benefit in the event of a divorce? What happens if one partner dies?
- One or both partners may want to change separate property into community property or vice versa.
- You or your spouse, or both of you, may have children from a previous marriage or marriages. A postmarital agreement can clarify which property will go to the children and which to you or to your partner in the event of divorce or death, thus easing the children’s concerns as well as those of the two partners. For example, a postmarital agreement may provide that, in the event of divorce or death, you will have a life estate in the house or may have the right to remain in the house for a certain number of years, at which point it reverts to the children.
- Very complex business arrangements, such as trusts and limited partnerships can be clarified with instructions as to how they are to be “unwound” and allocated in the event of divorce or death.
Addressing all the holdings by both spouses in a “global” way can prevent a lot of conflict in the future and is far less expensive than fighting out the division of property in court.