Many couples are familiar with prenuptial agreements – legal contracts signed before marriage that outline how assets and responsibilities will be handled in the event of divorce or death. However, fewer people know about postnuptial agreements, which serve a similar purpose but are created after a couple has already married.
If you’re married and wondering whether a postnuptial agreement might benefit your relationship, you’re not alone. Life circumstances change, and what seemed unnecessary before marriage might become essential years later. Understanding when and why you might need a postnuptial agreement can help protect your family’s financial future and provide peace of mind.
What Is a Postnuptial Agreement?
A postnuptial agreement is a legally binding contract between married spouses that outlines how their assets, debts, and other financial matters will be divided in the event of divorce, separation, or death. Unlike prenuptial agreements, which are signed before marriage, postnuptial agreements are created after the couple has already wed.
In North Carolina, postnuptial agreements are enforceable when they meet specific legal requirements. These agreements can address property division, spousal support, inheritance rights, and other financial matters, giving couples control over their financial future rather than leaving these decisions to state law.
Why Do People Create Postnuptial Agreements?
Significant Changes in Financial Circumstances
One of the most common reasons couples consider postnuptial agreements is a substantial change in their financial situation. Perhaps one spouse receives a large inheritance or gift from family members, fundamentally altering the couple’s wealth. A spouse might start a successful business or professional practice that grows beyond initial expectations. Career advancement can lead to dramatically increased income, or one spouse might return to school for additional training, temporarily reducing household income while building future earning potential.
Investment gains or losses can also substantially alter a couple’s net worth over time. When these changes occur, couples often realize their original assumptions about their financial future no longer apply, making a postnuptial agreement a practical way to address new realities and ensure both spouses feel secure about their financial arrangements.
Protecting Business Interests
If one spouse owns a business or professional practice, a postnuptial agreement can help protect these assets from being subject to division in a potential divorce. This becomes particularly important when the business was started during the marriage, as North Carolina generally considers assets acquired during marriage to be marital property subject to division.
The agreement becomes especially valuable when one spouse has contributed significantly to the other’s business success, either through direct involvement or by managing household responsibilities that allowed the business owner to focus on growing the enterprise.
For businesses with partners, a postnuptial agreement can also protect other business owners from potential complications arising from divorce proceedings.
Addressing Debt Concerns
These agreements can specify how existing debts will be handled, clarify which spouse bears responsibility for specific debts, and protect one spouse from the other’s future debt obligations.
This protection becomes particularly important when one spouse has student loans, business debts, or other financial obligations that existed before marriage or were incurred for individual rather than family benefit. The agreement can also establish guidelines for how future debt will be managed and who bears responsibility for different types of financial obligations.
Blended Family Considerations
Couples in second marriages or those with children from previous relationships often use postnuptial agreements to ensure children from previous relationships receive their intended inheritances. Without such agreements, state law might not distribute assets according to the parents’ wishes, potentially leaving children from earlier relationships with less inheritance than intended.
These agreements can protect assets specifically designated for certain children, clarify financial responsibilities toward stepchildren, and help balance obligations to current and former families. For parents who want to ensure their children receive family heirlooms, real estate, or other specific assets, a postnuptial agreement provides clear legal protection for these intentions.
Reconciliation After Marital Difficulties
Sometimes couples create postnuptial agreements as part of reconciling after a period of marital difficulty. These agreements can provide financial transparency and accountability, addressing concerns that may have contributed to marital problems. They offer reassurance about future financial security and create a framework for rebuilding trust between spouses.
When financial disagreements or hidden spending has damaged a marriage, a postnuptial agreement can establish clear expectations and consequences, helping couples move forward with greater confidence in their financial partnership.
Requirements for Valid Postnuptial Agreements in North Carolina
For a postnuptial agreement to be enforceable in North Carolina, it must meet several important requirements. Both spouses must provide complete and honest disclosure of their assets, debts, and income. Hidden assets or financial information can make an agreement invalid, so transparency is essential throughout the process.
The agreement must be entered into voluntarily, without coercion, fraud, or duress. Both parties should have adequate time to review and consider the terms, and neither spouse should feel pressured to sign. Although not legally required, it’s strongly recommended that each spouse have their own attorney to ensure their interests are protected and the agreement is properly structured. This independent representation helps ensure both parties understand their rights and the implications of the agreement.
The agreement must be in writing, signed by both parties, and properly notarized according to North Carolina law. Oral agreements or improperly executed documents will not be enforceable.
When Postnuptial Agreements Might Not Be Appropriate
While postnuptial agreements can be valuable tools, they’re not right for every situation. If there’s significant pressure from one spouse to sign, the agreement may be considered involuntary and therefore invalid.
Similarly, if the relationship is already severely strained, a postnuptial agreement might not address the underlying issues and could potentially make matters worse.
The agreement would not be appropriate if one spouse lacks the mental capacity to understand the agreement’s terms and implications. If the proposed terms are extremely unfair or one-sided, the agreement might be unenforceable.
Most importantly, if there are concerns about domestic violence or abuse, attempting to negotiate a postnuptial agreement could potentially escalate dangerous situations. In such cases, safety should be the primary concern, and other legal protections should be sought.
Protect Your Future With Eatmon Law Firm, PC
If you’re wondering whether a postnuptial agreement might benefit your marriage, the best place to start is with a consultation with an experienced family law attorney. At Eatmon Law Firm, PC, we’re here to help you understand your options and make informed decisions about your family’s future.
Don’t wait until a crisis occurs to protect your family’s financial security. Contact Eatmon Law Firm, PC today at 919-435-0565 to schedule a consultation and learn more about how a postnuptial agreement might benefit your unique situation. We’re conveniently located in Wake Forest, and are here to help with your next steps to protect your future.