Prenuptial Agreements
Prenuptial agreements (or “prenups”)can be exceptionally useful tools to prevent discord in the event of a divorce. They can predetermine how assets will be divided, whether or not there will be spousal maintenance or alimony payments, and what child support may look like if you do have children. It’s one of the few very clear intersections between family law and contract law.
What happens, though, if you decide after the fact that you wish you’d had a prenuptial agreement drafted? In the state of Minnesota, that’s where the postnuptial agreement comes into play.
Postnuptial Agreements
Postnuptial agreements (as you may have surmised from the change in prefix from pre- to post-) can address essentially all of the same information as you might in a prenup. Married couples can enter into a postnuptial agreement (or “postnup”) for the purpose of addressing what happens with marital property, alimony/spousal support, and debt and property division in the event of a divorce.
They can also be used to affect your and your spouse’s rights to assets in the event of either of your deaths, including disclaimer of the spousal elective share (a topic for another article). Postnuptial agreements differ from prenuptial agreements, however, in their drafting requirements, which are far more strict.
What You Need To Know About Postnuptial Agreements
In this article, you’ll learn what is necessary for drafting a postnuptial agreement, and what sorts of concerns and considerations your postnuptial agreement lawyer will want to address to make sure your postnup is as complete and bullet proof as it possibly can be.
Requirements
Minnesota state law (specifically Minnesota Statute § 519.11) spells out precisely the requirements for having a legally binding and valid postnuptial agreement. In addition to meeting all the requirements of a prenuptial agreement, for a valid postnuptial agreement the following must also be true:
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Both parties MUST be represented by a separate family law attorney and law firm (by contrast, a prenuptial agreement only requires that both parties have had the opportunity to seek advice of counsel). You absolutely cannot be represented by the same legal counsel, and your attorney cannot be giving legal advice to your spouse. It is ok if one spouse pays for both attorneys, and even if their attorney makes a referral to another attorney for the other spouse. It is strongly recommended that if you or your attorney refer your spouse to another postnuptial agreement attorney that the person you refer them to has several years of experience in the field and that this is not their first postnuptial contract.
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Postnuptial contracts absolutely can NOT determine the rights of either party regarding child custody, parenting time, or child support.
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For the postnup to remain valid, neither party may seek a divorce within two years of execution of the postnuptial agreement (unless the party seeking to enforce the agreement can establish that enforcing the postnup would be fair and equitable).
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The agreement must be made in writing, witnessed by two individuals who are not the parties’ family law attorneys, and notarized at the time of signing.
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If the agreement affects rights to real estate, the postnuptial agreement must be filed with the county recorder in the county where the real estate is situated.
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The parties must provide full disclosure to each other of all of their assets, income, and debts (this requirement is also present for prenuptial agreements).
The main differences between a postnuptial agreement and prenuptial agreement are essentially the timing of drafting (before and after getting married) and the additional requirement that both parties absolutely must be represented at the time of signing for a postnuptial agreement. They are very similar types of agreements, but these key differences are exceptionally important in ensuring validity of any postnuptial agreement.
Concerns to Address in a Postnuptial Agreement
So now that we know what HAS to be involved, what are the discretionary components of postnuptial agreements? Generally people have such agreements drafted to create peace of mind. They feel better know that in the unfortunate event their marriage ends, their divorce will not be drawn out and contentious because they have no doubt of the enforceability of this contract. Typically, a good postnup will address the following items:
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Separate Property. The parties will typically identify separate property, or nonmarital property - that is, property and assets that they either brought with them into the marriage or which the parties have already agreed shall belong solely to one party or the other in the event of divorce. This prevents any fights during the divorce regarding claims that an asset is nonmarital, which can alleviate large sources of stress, especially with real estate and other high value assets.
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Marital Property Division. The parties drafting a postnuptial agreement will commonly (nearly always) agree in advance on precisely how marital property will be split in the event of legal separation or divorce. While the court would typically divide such assets equally, the parties have the ability to recognize for their purposes exactly HOW that equal split will occur, or can specify a division of marital assets that is unequal if they believe it is more fair given the circumstances of their relationship.
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Alimony/Spousal Support. The postnuptial agreement can eliminate any right to spousal support either party might otherwise have in divorce or heavily modify it. Some parties will set minimum relationship lengths. For example, they may say the right to spousal support is waived unless the marriage lasts at least 15 years, where the court has no such formal minimum requirement. They can also choose to address things like infidelity, saying if the marriage dissolves as the result of a party’s infidelity that they waive any right to spousal maintenance.
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What Happens to Marital Assets After Death. Under Minnesota state law, even if one spouse drafts a will that says the other gets less than half of their estate, there is something we call the spousal elective share that says a person is entitled to up to 50% of their spouse’s estate (with that specific percentage determined by the length of the marriage). This can be modified or even completely waived by a postnuptial agreement. The parties can also enter into agreements such as agreeing to make sure their wills both equally divide assets between all the children of both parties after the death of the second. This is a relatively common provision found in second marriages, or first marriages where the parties had children prior to being in a relationship with each other.
Interested in Drafting a Postnuptial Agreement?
There are certainly more nuances to discuss and options available that can be discussed in detail in this short article. If you are interested in having a prenuptial agreement or postnuptial agreement drafted, please use the contact form on our website to schedule a free consultation.
