What is a Post-nup?
A postnuptial agreement is an arrangement made between two married individuals, or a domestic partnership, that comes into effect after the marriage or domestic partnership. The purpose of the agreement is to resolve potential future areas of disagreement, usually involving asset division in the event of a divorce or death of one of the parties. Other potential areas of resolution include future spousal support payments and the management of a spouse’s medical care.
While postnuptial agreements are similar to prenuptial agreements in many ways, a key difference is the fact that they are created after the two individuals are already married. Because of this, the creation of the agreements can be used to resolve issues that became apparent only through marriage and the agreement can also stipulate how these issues will be amended should the circumstances surrounding them change .
The following are some common scenarios in which a couple may consider a postnuptial agreement:
- A specific asset such as a business was brought into the marriage and one party expects it to remain solely theirs in the event of divorce.
- Two people are married with one person having a high net worth and the other having a much lower net worth and a potential for significant debt in the future.
- One person has children from a previous marriage who they want to protect financially in the event of a divorce.
- On a related note, one person has children from a previous relationship and does not want their assets to be part of a definite inheritance for the other person.
- The two people are jointly filing for bankruptcy and need to have an agreement in place about asset division in the event of a divorce.
Formal Requirements in Utah
Legal Requirements in Utah for Postnuptial Agreements to be Valid
As of 2015, postnuptial agreements in Utah are governed under Utah Uniform Premarital Agreement Act. The specific Utah Code Salt Lake City Utah cites for this act is Section 57-3a, and it governs both prenuptial and postnuptial agreements. Here’s a closer look at the legal requirements all postnuptial agreements in Utah must meet to be valid:
When both spouses create the postnuptial agreement, they must do so based on their free consent. In other words, no one spouse can force the other into signing the document. If there is proof that one spouse was coerced into signing the agreement under duress, the postnuptial agreement is not valid.
As previously mentioned, the agreement must be entered into voluntarily, but this also means spouses agree to the laws that determine the effect of the agreement. Essentially, when they sign, spouses are agreeing to use a specific state’s law to interpret the validity of the agreement. Normally, the law of whichever state the couple resides governs the agreement, but some individuals may choose another state’s law.
Regardless of what law the spouses choose to govern their agreement, they must have a full understanding of the implications of the agreement and the financial resources of each other and be fully aware of the impact of the terms of their postnuptial agreement on their respective property interests. Thus, it’s important for each spouse to be fully informed about their spouse’s finances.
To satisfy the requirements set forth by Utah Code, the only formalities necessary in drafting a valid postnuptial agreement are either a notarized signature or a signature while in front of a notary public. Because postnuptial agreements usually involve large amounts of money or property an attorney should draft the document.
Advantages of a Post Nup
While a Postnuptial Agreement may have a negative connotation, it also has its advantages. As with any contract, it provides structure and clarity where there was none before. For many couples, the thought of possibly facing divorce is terrifying; however of it is found that they can’t communicate, are concerned that one spouse will leave the other with nothing, or have other concerns, an agreement can lessen those concerns.
These agreements don’t only apply when at least one spouse is in the military or when the couple has significant wealth. They benefit average couples as well:
While most people concentrate on the above benefits, the biggest one by far is the ability to avoid court intervention. For example without a Postnuptial Agreement, total income and assets are divided down the middle. If you have two cars, one of which costs $80,000, and you have one child and live in Utah County, not some fancy neighborhood, you are going to have to sell that car and split the money. In addition, you are going to have to pay alimony and child support which is ordinarily 50% of your combined net incomes, as well as 50% of your overtime, and you will owe $15,000-$20,000 in attorneys’ fees to your attorney because of the complexity of the case (and the angry bickering).
Whereas with Postnuptial Agreements, you can simply negotiate who wants what and leave the rest alone. You don’t pay the alimony and child support. One spouse does not become judgment proof. You keep the property. You each get a fair share of the other’s retirement. You don’t get charged attorneys’ fees to settle the case. You don’t give your lawyers over 50% of your income. You don’t owe anyone anything, ever.
Some states require a waiting period before filing for divorce after signing a Postnuptial Agreement. This is probably a good thing in this day and age. However, for those who do not have a lengthy waiting period, circumstances can accelerate quickly into a divorce and subsequent litigation. Having the right agreement in place can be a godsend.
Disadvantages and Concerns with Post Nuptials
Unfortunately, the state of Utah’s family law courts have established that enforceability of a postnuptial agreement is at the discretion of the court.
The potential drawbacks and criticisms of a postnuptial agreement generally fall into several categories:
Too late font relevant benefits ratio. By the time postnuptial agreements are utilized, there may be no benefit derived from its use. For example, if you earn $50,000, it is unlikely that you will ever have an issue on division of property, but with an income of $5,000,000, there could be a large division issue.
Oppressive terms analysis. Are the terms oppressive? The courts seem to view this as an issue of fairness, and they do not necessarily mesh considerations of fairness with the law. Therefore, the issue of whether a postnuptial agreement will be enforced in a Utah family law court comes down to the court’s discretion.
Unfair advantage. Did one party benefit at the expense of the other? In determining whether a postnuptial agreement was fair , the court will also look at whether one party has taken unfair advantage of the other party; do they have a better understanding of assets available for division in a divorce? Have they hidden assets or devalued their assets prior to entering into the postnuptial agreement.
Lack of consideration. While postnuptial agreements are contracts, a contract requires consideration or "exchange" for the obligations contained in the agreement. Simply agreeing to do something is not consideration, the parties must give something and receive something. The exchange of consideration is critical to the enforcement of a postnuptial agreement. If it could be proven that the consideration exchanged by the non-titled party to the agreement was insufficient to support the agreement, the courts have held such agreements unenforceable. A postnuptial agreement can fall under a lack of consideration if one spouse receives all the benefits in divorce and none of the risks of remaining married.
How to Create a Post Nuptial Agreement
Creating a postnuptial agreement in Utah involves several key steps, which begin long before the actual document is even drafted. Below are the step-by-step instructions to follow when creating a postnuptial agreement in Utah:
Step 1: Interview and Retain an Attorney
Finding an attorney experienced in creating postnuptial agreements should be the first step taken by both parties. Not only does this attorney need to be experienced and knowledgeable in matters of divorce and child custody, but this person needs to be able to provide each party with sound legal advice and guidance throughout the process.
Step 2: Decide on the Content of the Postnuptial Agreement
During the initial consultation, you will most likely discuss what issues should be dealt with in the agreement. You may bring up issues such as child support, child custody, spousal support (alimony) and property division. Some parties may desire a completely equal division of properties that they acquired during the marriage, while others may create a postnuptial agreement for the simple sake of eliminating the possibility of a contentious divorce. In any case, the parties should be agreeable to the terms they intend to put down in writing.
Step 3: Negotiate the Terms of the Postnuptial Agreement
Once the parties have agreed to what issues should be discussed in the postnuptial agreement, it is time to start negotiating the terms. In some cases, the terms will be changed later on, so don’t be too alarmed if your attorney may want to change a few terms at a later date. And if either party feels too much pressure to agree to the terms of the postnuptial agreement, chances are the postnuptial agreement will not be considered valid by a court.
Step 4: Sign and File the Postnuptial Agreement
Once the parties have agreed to the terms of the postnuptial agreement, both parties must sign it, and in some cases, it will be filed with the court. Both parties should retain their own copy before leaving the office. Some attorneys may retain the original copy, while others will keep copies of it in their files.
Frequently Asked Questions about Utah Post Nuptial Agreements
Frequent questions about Utah Postnuptial Agreements
As more and more people have become aware of the concept of the postnuptial agreement, they have been finding themselves with a lot of questions. Here are some of the more common ones:
What is the cost of the postnuptial agreement?
The cost to create a postnuptial agreement can vary widely depending on the attorney you choose to prepare it. However, postnuptial agreements tend to be less costly to negotiate than a prenuptial agreement because neither party has to prepare for marriage while planning for the potential of divorce at the same time (writing a prenuptial agreement). Most of the time you may be able to prepare a postnuptial agreement for a few hundred or a few thousand dollars when you start with a family law attorney who has experience with postnuptial agreements.
Will a postnuptial agreement change over time or if our circumstances change after it is drafted?
In general, a postnuptial agreement reflects your intentions on the effective date of the contract and will remain in effect until you amend or revoke it. However, the creation language in the statutory form postnuptial agreement says that it may be changed or revoked if it is signed by both parties at a later date. Aside from that , a postnuptial agreement may still be relatively new to most divorcing Utah couples, so the case law on the enforceability of certain provisions is still evolving and will evolve even more as these agreements become more commonplace.
What’s the difference between a postnuptial agreement and a separation agreement?
There are some similarities between a separation agreement and a postnuptial agreement, however there are some important distinctions that break them apart. A separation agreement is a legally binding divorce settlement reached by married spouses who have separated in anticipation of their divorces. A postnuptial agreement is a professionally drafted contract, prepared and negotiated with care to comply with statutory requirements. Although it is not illegal to draft your own postnuptial agreement, it could result in the unintentional waiving of rights to support and the division of property and financial assets.
With divorce rates on the rise and more and more couples seeking legal advice about what to do, Utah postnuptial agreements are becoming increasingly popular. A postnuptial agreement may be a great choice for many couples, but it is important that you speak with an experienced family law attorney to find out if it is a good option for you.