A postnuptial agreement is similar to a prenuptial agreement except that you create a postnup after marriage rather than before you walk down the aisle.
What kind of circumstance would cause you to consider a postnup, and what benefits can you expect?
Protecting your assets
A sudden change in your finances may cause you to think of a postnuptial agreement. Perhaps the hard work you put into your business before you married is paying off now. Your income has risen dramatically, and you expect it to increase even more in the years to come. A postnup can help you protect your share of the income—or more—in the event of a divorce. Another example is the mountain cabin you inherited. That is your separate property unless you decide to rent it, at which time the rental income becomes community property. You could create a postnuptial agreement to address this situation.
Protecting your children
In the event of a divorce, you may want to ensure financial stability for your children through a previous marriage. In a postnup, you can provide instructions that will prevent assets intended for your children from going to your spouse.
Protecting your future
If you are among those facing a later-in-life divorce, you may be in for a shock when you realize that your retirement nest egg will undergo a split down the middle. A postnuptial agreement can be a focal point in the property division phase of the proceedings. It can simplify the process by identifying certain aspects of the settlement in advance and will help protect your finances as you enter the next stage of your life.