When a spouse owns a business or has accumulated many assets, they may be wondering what they can do to protect these things should the marriage end. Most people are familiar with prenuptial agreements, but these agreements must be signed before the marriage. For those in California who are in high-net-worth marriages without a prenup, there is another option to hedge against divorce. Postnuptial agreements can be created after a couple has wed.
What is a postnuptial agreement?
A postnuptial agreement is almost the same as a prenuptial agreement. The biggest difference is that a postnuptial agreement is signed after a couple has legally married, while a prenup is put in place before marriage. However, the two are very similar in that they are both legal contracts that are agreed upon and signed by both parties to outline how property and assets will be divided should their marriage end.
How to know if a postnup is needed
Many spouses who create a postnuptial agreement do so simply because they feel they should discuss the division of assets after they are married and have settled into their marital routine. Postnuptial agreements can also benefit spouses who own businesses because postnups protect the income or assets a spouse earns during the marriage. If the couple divorces without a postnup, a former spouse could be entitled to a percentage of the business or its income.
Creating a postnup
If a couple has a postnuptial agreement in place in the event of a high-asset divorce, they can usually avoid an expensive and lengthy court trial. For some couples, this advantage is enough to negotiate a postnup. However, care and diligence must be taken to properly draft and create a postnuptial agreement in California. For those who are interested in postnuptial or prenuptial agreements, it is important to speak with an experienced family law attorney.