Divorce may be difficult emotionally, but that may pale in comparison to the financial devastation it can carry. Estimates provided by the Huffington Post suggest...Read More
A post-nuptial agreement (also known as a “postnup”) is a formal, written consensus between two parties, entered into after the marriage occurs. In order for a postnup to be binding, the following requirements must be met: (1) it must be in writing, (2) it must be signed and notarized, (3) it must be fair and reasonable, (4) there must be full disclosure of assets by both parties and (5) both parties must agree to the terms of the postnup. Judges tend to carefully scrutinize postnups because of the risk of coercion by one party. In order to improve the likelihood of acceptance, both parties should secure their own attorneys and the postnup should attempt to distribute assets equitably. The purpose of a postnup is to provide protection to both parties by enabling them to agree on the division of assets in the event of a divorce without regard to the guidelines provided under Oregon law. Postnups have seen an increase in popularity as spouses want to provide predictability in the allocation of their business interests or in the handling of inheritances or gifts received during the course of their marriage. Postnups are able to address a host of issues, including the following:
Property owned by either party before marriage is considered separate property. Postnups serve to clarify what is separate property. Examples of separate property include homes that one spouse owned before the marriage and other possessions owned by one spouse before the marriage including vehicles, artwork, jewelry and other personal possessions. Provided that such separate property is not combined with marital property during the course of the marriage, it will continue to belong to one spouse only at the time of the divorce.
Define marital property:
Just as you can define what you want to be considered separate property in a postnup, you can identify property that you want to be considered marital property, even if it actually is separate property. Whether items are actually separate property or part of the marital property, a postnup protects the estate by defining what the marital property is and what this encompasses. This could mean dividing certain accounts or separating a house based on what the postnup provides.
Similar to property, a postnup can clarify those debts owed by either spouse separately. In the event of a divorce, those separate debts would remain with the individual spouse. Parties to a postnup should make sure the agreement clearly defines what belongs to each of them and who is responsible for what debt.
Alimony or Spousal Support:
Postnups can establish when alimony or spousal support will be paid, the amount to be paid and the length of the support payments. Many couples choose to use a postnup to limit alimony or exclude it in the case of marital misconduct (e.g., infidelity, abuse, etc.)
If one spouse enters the marriage with children from a previous relationship, a postnup is useful to ensure that certain assets pass to those children regardless of what happens in the marriage. Many times postnups are utilized to protect children’s inheritance.
Although a postnup is useful in clarifying some issues, the two most significant areas it cannot address are the allocation of child custody and the determination of child support. It is up to the court to determine child custody according to the child’s best interests and to calculate child support. Entering into a postnup does not mean that you do not trust your partner or that you believe that divorce is inevitable. To the contrary, postnups can provide couples with peace of mind regarding future events and reduce future financial conflicts. In addition, in the event that you do get divorced, a postnup can make the process faster and less costly.