Georgia Family Law Blog

Quit fighting -- get a postnuptial agreement

Can a piece of paper save a marriage? One suburban Boston couple figured it was worth trying so they entered into a legal agreement to manage a major source of tension in their relationship - money.

The couple, in their late 50s, met in college, dated for six years, married and had two children. And they fought constantly over their finances.

The husband and wife, who asked to remain anonymous, had taken out two mortgages on their home and spent inheritance money to pay down debt from the husband's consulting business.

"I would lie awake at night thinking we're going to lose the house and lose everything we ever worked for," says the wife, who teaches at a local university. "This was with me 24-7."

She valued stability; he saw debt as a means of building his business. Several marriage counselors couldn't help them come to terms with their different attitudes toward money.

Then they came across an article about marital mediation, and it mentioned postnuptial agreements.

"It's the same concept as a prenuptial agreement," says Los Angeles attorney Scott Weston, co-author of "I Do, You Do ... But Just Sign Here: A Quick and Easy Guide to Cohabitation, Prenuptial and Postnuptial Agreements."

"Instead of being done before a marriage, it's done during a marriage," he says.

Postnups, while much less common than prenuptial agreements, are gaining in popularity. Nearly 50 percent of attorneys polled by the American Academy of Matrimonial Lawyers reported an increase in the number of postnups from 2002 to 2007.

The agreements usually are used to settle financial issues, says Weston, whose high-profile clients have included Robert Iger, chief executive of the Walt Disney Company, as well as author Terry McMillan and boxer Oscar de la Hoya.

Postnups might be used to determine who owns assets, set a budget for household expenses or remove a business from the table in the event of a divorce. Couples also have used them to decide such things as how often the mother-in-law gets to visit or how many boys-only weekends the husband gets to take.

'I was able to breathe easier'

A postnuptial or mediated agreement can help save a couple's relationship -- if that's their goal.

"In cases where couples want to stay married, it can apply very efficiently," says Cambridge, Massachusetts, attorney John A. Fiske. "If they don't want to stay married, it's hopeless."

The Boston couple, who had been married 30 years, fell in the former camp. Fiske helped them put into writing a mutually acceptable financial plan. They agreed to transfer their house into the wife's name, both to address her fear of losing the asset and to insulate it from the husband's business debts, and to split the mortgage and other household expenses.

That was 18 months ago, and they credit the post-nuptial agreement with helping them become a mutually supportive couple again.

"In my case, I wanted financial security -- not necessarily a new BMW every year, but to feel some financial security," she says. "What he wanted was emotional support from me."

The agreement largely has quelled their arguments, they say, even though the husband's consulting business is still between $150,000 and $200,000 in debt.

"I don't think the issue has ever totally gone away," the wife says, "but I feel like I was able to breathe easier... without this being in the forefront all of the time."

Most couples do use the postnups as a blueprint for an eventual divorce, according to Elinor Robin, a Boca Raton, Florida, conflict strategist and mediator. But she thinks successful mediation can reveal the potential to save a marriage.

"The very process of working on this arrangement is a positive exercise for most couples," Robin says. "People will say (a postnup) ruins the romance, it ruins the love. If you can't have difficult discussions, that's a death knell for a marriage."

Postnup takes three lawyers

Both husband and wife should have a postnup reviewed by their own lawyers or it's not likely to withstand a legal test. For the Boston couple, that meant $5,000 in fees: Fiske drew up the agreement and then they each hired individual lawyers review it.

Getting a second opinion also allows the couple to make sure the terms are right for them. The husband's lawyer advised him against signing over the house, but he says he trusted his wife and felt it was the right move.

"I was told she could walk off with the house and leave (me) in the cold," he says. "I viewed it as, I had used up my amount of equity in the house with the amount of debt I had. It wasn't (my wife's) fault. I would rather have the debt on my shoulders and not have the emotional problems."

Both view their postnup as the reason they made it to their 30th wedding anniversary.

"We both feel it saved our marriage," the wife says. "It didn't make our problems go away, but it allowed us to keep going as a couple." 

SOURCE: CNN.com

Postnuptial Agreements

According to the New York Times on December 9, 2007 postnups are becoming more popular (the article appears below). Dr. Phil has featured them on TV, and lawyers belonging to the American Academy of Matrimonial Lawyers who were polled state that they are being asked far more frequently to draft postnups. Usually, say these lawyers, the postnup is entered into after discovery of some marital infidelity and perhaps only props up a marriage for a while. The postnup does allow the parties to define their rights and obligations in the event of a divorce or separation.

Postnups are not exactly like prenups. A prenuptial is entered into prior to marriage. Presumably, the parties have a lesser ability to understand or to discern the true net worth of each other. Often, the parties to a prenup have disparity in their net worth and often in their business acumen. One party may have a far weaker position, and thus, fairness has been interjected into the requirement for enforcement of a prenuptial agreement. Case law in Michigan allows a prenup to be invalidated if the party opposing enforcement can prove that

• It was obtained through fraud, duress, mistake, or misrepresentation or nondisclosure of material fact,
• It was unconscionable when executed, or
• The facts and circumstances are so changed since the agreement was executed that its enforcement would be unfair and unreasonable.

SOURCE: New York Times

SOURCE FOR POST: Updates in Michigan Family Law

Related Posts:

Postnups becoming ‘new’ prenups

Post Nuptial Agreements Gain Popularity

Postmarital Agreements

New to Marriage: the Postnup

America's Top Divorce Lawyers Cite Postnuptial Agreements as Growing Trend

According to the New York Times on December 9, 2007 postnups are becoming more popular (the article appears below). Dr. Phil has featured them on TV, and lawyers belonging to the American Academy of Matrimonial Lawyers who were polled state that they are being asked far more frequently to draft postnups. Usually, say these lawyers, the postnup is entered into after discovery of some marital infidelity and perhaps only props up a marriage for a while. The postnup does allow the parties to define their rights and obligations in the event of a divorce or separation.

Postnups are not exactly like prenups. A prenuptial is entered into prior to marriage. Presumably, the parties have a lesser ability to understand or to discern the true net worth of each other. Often, the parties to a prenup have disparity in their net worth and often in their business acumen. One party may have a far weaker position, and thus, fairness has been interjected into the requirement for enforcement of a prenuptial agreement. Case law in Michigan allows a prenup to be invalidated if the party opposing enforcement can prove that

Postnups becoming ‘new’ prenups

Sam Hasler of the Indiana Divorce and Family Law Blog recently posted this report on an article on post-nuptial agreements:

Who else cares about your marriage?

Besides the in-laws and your closest friends? How about the boss?

Postnuptial agreements are gaining popularity as an estate-planning tool, and some hedge funds and private-equity firms have asked their top executives to sign them to protect their companies in case of a messy divorce, according to attorneys and financial advisers.

***

Postnup agreements are similar to prenuptial agreements, but they are crafted and signed after a couple is married. Attorneys say that the agreements actually can strengthen marriages, because the couple is able to resolve disputes about money and then focus on the marriage itself.

This from the Investment News article, Postnups becoming ‘new’ prenups. The article appears below:

Post Nuptial Agreements Gain Popularity

Daniel Clement at the New York Divorce Report posted the following article  on post-nuptial agreements this past week:

The Financial Times reports that there is a growing trend for post nuptial agreements.   Like the pre-nuptial agreement, the post-nuptial agreement sets out the parties’ rights, obligations and liabilities upon the termination of marriage by either death or divorce. The only difference between the two marital agreements is that the post-nuptial agreement is executed sometime after the parties are wed.

According to the Financial Times, post-nups are particularly popular with hedge fund managers.   This, however, makes perfect sense.   The financial tycoons are merely seeking to limit their downside risk in the event that their marriages become, to use the street slang, “bearish” (or in the event they want to seek other opportunities.)

The article notes that at least one hedge fund requires its new partners to have a marital agreement in which the partner’s spouse waives his/her claims against the fund.   The hedge fund firms are looking to protect themselves since the partnership interest is a marital asset and is subject to equitable distribution.   In order to ascertain the value of the partnership interest, the partnership needs to be appraised opening the door to an inspection of the hedge funds books and records.

So why would a spouse waive his or her claim against partnership interest in the hedge fund? The spouse is probably banking that the marriage will continue and he/she will continue to enjoy the lifestyle afforded by interest in the hedge fund. But, in the event the marriage ends in divorce, the consideration for the waiver is probably a generous distributive award.   

SOURCE FOR POST: New York Divorce Report

Postmarital Agreements

Postmarital agreements or postnuptial agreements are agreements entered into after a marriage has taken place, but before the parties seek to end their marriage. As with premarital agreements, one or both of the parties usually is seeking to protect assets or income in the event of divorce or death.

A married couple may seek to enter into a postmarital agreement after a significant financial change or a period of marital conflict.

The law regarding the validity and enforcement of postmarital agreements is not well developed.

The standard for enforcement of postmarital agreements most likely is similar to the standards discussed earlier for enforcement of premarital agreements. Key criteria for validity of the agreements include: full disclosure of assets, absence of duress, and fairness.

When a man and woman are married (instead of just contemplating marriage), they may be held to a very high standard of fairness when dealing with each other on financial issues--perhaps a higher standard than would be the case if they were entering into a premarital agreement.

When entering into a postmarital agreement, it would be a good idea for the parties to articulate in writing why they are entering into the agreement and to be sure the agreement is fair for both parties.

SOURCE: FindLaw

New to Marriage: the Postnup

Some Already Wed Couples Agree to Disagree

It may not be romantic, but a number of couples are using postnuptial agreements to avoid future fights over finances.

The postnup, which is neither as popular nor as tested in the courts as its big sister, the prenup, is an agreement signed during marriage. The voluntary contract could be used to decide such matters as the division of assets and income in a death or a divorce. But it also has limits: Postnups can't be used, for instance, to determine child custody and support issues, which need to be determined by a court.

"Financial issues often cause people to get divorced, and one way to try to avoid that is by writing a postnup," says Gaetano Ferro, president of the American Academy of Matrimonial Lawyers, a trade association. He says the use of postnups is growing; in a recent poll of AAML members, 49% said they had seen an increase in postnups during the past five years.

While the actual postnup document could be drafted by one lawyer, both parties need legal representation during the process, which could cost anywhere from $5,000 to $25,000 depending on the complexity of the case, says Leon Finkel, a matrimonial lawyer in Chicago. To complete a postnup, people need to fully disclose their financial assets and liabilities including salary and other sources of income. Tax returns and financial statements are needed.

Most states recognize postnuptial agreements as long as everything has been fully disclosed, and the parties were represented by independent legal counsel, Mr. Finkel says. Still, prenuptial agreements have been around a lot longer and have legal precedent. "They've been tested, and there's more law that governs them," says Mr. Finkel.

When postnups come up in legal disputes, courts are asking "does it smell coercive or does it smell reasonable?" says Brian Bix, a law and philosophy professor at the University of Minnesota. "There isn't that much case law" with regards to postnups. His advice: Check with a lawyer in your state.

Raising the idea of a postnup isn't easy, says Mr. Finkel. He suggests to clients who want to bring it up with their spouse to say: "I want to put our financial cards on the table, and we want to plan in case something happens to us." Another possibility, he says, is to bring it up during a session with the marriage counselor, if you are seeing one. A growing number of financial advisers also are recommending it to clients, especially if they haven't planned for important life events.

Some people use a postnup because they think their marriage is on the rocks, but it isn't unusual to write one to update a prenup, legal experts say. Indeed, more couples are using both prenups and postnups, especially in a second marriage.

While a postnup "suggests a lack of trust in one another," says Debbie Cox, a wealth adviser with J.P. Morgan Private Bank in Dallas, "it's really about prudent management of assets."

Eric Cramer, a financial consultant in Alpharetta, Ga., for Charles Schwab Corp., says more women are using postnups when they step off the career track to raise children. They like the idea of knowing they will have some financial security if something happens to their marriage.

Laura Morgan, a family-law attorney in Charlottesville, Va., and the co-author of "Attacking and Defending Marital Agreements," says couples also use postnups "to do something nice." Someone might want to give a spouse a gift of stock, for instance. "It's a way of making a gift during marriage," she says.

From The Wall Street Journal (subscription required).

SOURCE FOR POST: California Divorce and Family Law Blog

Some Already Wed Couples Agree to Disagree

It may not be romantic, but a number of couples are using postnuptial agreements to avoid future fights over finances.

The postnup, which is neither as popular nor as tested in the courts as its big sister, the prenup, is an agreement signed during marriage. The voluntary contract could be used to decide such matters as the division of assets and income in a death or a divorce. But it also has limits: Postnups can't be used, for instance, to determine child custody and support issues, which need to be determined by a court.

"Financial issues often cause people to get divorced, and one way to try to avoid that is by writing a postnup," says Gaetano Ferro, president of the American Academy of Matrimonial Lawyers, a trade association. He says the use of postnups is growing; in a recent poll of AAML members, 49% said they had seen an increase in postnups during the past five years.

While the actual postnup document could be drafted by one lawyer, both parties need legal representation during the process, which could cost anywhere from $5,000 to $25,000 depending on the complexity of the case, says Leon Finkel, a matrimonial lawyer in Chicago. To complete a postnup, people need to fully disclose their financial assets and liabilities including salary and other sources of income. Tax returns and financial statements are needed.

Most states recognize postnuptial agreements as long as everything has been fully disclosed, and the parties were represented by independent legal counsel, Mr. Finkel says. Still, prenuptial agreements have been around a lot longer and have legal precedent. "They've been tested, and there's more law that governs them," says Mr. Finkel.

When postnups come up in legal disputes, courts are asking "does it smell coercive or does it smell reasonable?" says Brian Bix, a law and philosophy professor at the University of Minnesota. "There isn't that much case law" with regards to postnups. His advice: Check with a lawyer in your state.

Raising the idea of a postnup isn't easy, says Mr. Finkel. He suggests to clients who want to bring it up with their spouse to say: "I want to put our financial cards on the table, and we want to plan in case something happens to us." Another possibility, he says, is to bring it up during a session with the marriage counselor, if you are seeing one. A growing number of financial advisers also are recommending it to clients, especially if they haven't planned for important life events.

Some people use a postnup because they think their marriage is on the rocks, but it isn't unusual to write one to update a prenup, legal experts say. Indeed, more couples are using both prenups and postnups, especially in a second marriage.

While a postnup "suggests a lack of trust in one another," says Debbie Cox, a wealth adviser with J.P. Morgan Private Bank in Dallas, "it's really about prudent management of assets."

Eric Cramer, a financial consultant in Alpharetta, Ga., for Charles Schwab Corp., says more women are using postnups when they step off the career track to raise children. They like the idea of knowing they will have some financial security if something happens to their marriage.

Laura Morgan, a family-law attorney in Charlottesville, Va., and the co-author of "Attacking and Defending Marital Agreements," says couples also use postnups "to do something nice." Someone might want to give a spouse a gift of stock, for instance. "It's a way of making a gift during marriage," she says.

From The Wall Street Journal (subscription required).

SOURCE FOR POST: California Divorce and Family Law Blog

Post nuptial agreements are popular

Postnuptial agreements -- after-the-wedding contracts between couples -- are becoming more popular, according to a recent survey of the American Academy of Matrimonial Lawyers, which found that 49 percent of its members saw a rise in postnuptial agreements in the past five years.

Some couples are using them as Cupid's antidote for keeping financially unstable marriages together, said lawyer Gregory Herring, who has had wealthy clients choose postnuptial agreements over divorce.

"More and more start divorce proceedings because of financial issues and then find a way to come to terms," he said of his clients in Ventura, Calif. "Oftentimes, parties have a power struggle that really arises from insecurities."

Postnuptial agreements are the same as prenuptials, only the timing is different. The prenuptial is agreed to before marriage, the postnuptial is agreed to after. Both concern how assets will be divided if the marriage ends.

Terms of the agreement can cover a number of issues, including disputes over potential finances, assets, children, even household chores.

It's the older couples, typically in second or third marriages, that want them, lawyers say. They may have children from their first marriage whose interests they wish to protect, or a bigger pot of assets that they're not willing to risk losing. The bottom line, they say, is financial security.

America's Top Divorce Lawyers Cite Postnuptial Agreements as Growing Trend

In a recent poll of American Academy of Matrimonial Lawyer (AAML) members, 49% of the divorce attorneys cited an increase in postnuptial agreements during the past five years. Interestingly enough, 58% of the respondents most frequently draw up the agreements as a result of a request made by both parties, rather than it coming from either a husband or wife individually.

Rising in popularity throughout recent years, postnuptial agreements are voluntary marriage contracts between couples who are already married. The terms of postnuptial agreements can cover a wide variety of issues within a marriage, including disputes over potential finances, assets, children, and household chores. Couples can also seek a postnuptial agreement if the financial status of one or both partners changes dramatically after the marriage. The overall goal of the agreements is to help stop any potential conflicts and promote a stronger relationship.

Source: Yahoo Finance and DivorceNet.com