Many divorcing couples over the age of 50 face a financial future cobbled together from a retirement nest egg split in half.
However, those who sign a postnuptial agreement will likely enter the next chapter of their lives with less stress and more security.
The postnuptial agreement explained
The postnuptial agreement is similar in content to the prenuptial agreement, except that the couple signs it after the marriage takes place rather than before. Often, the reason for creating a postnup is that a sudden change in finances occurs for one spouse. For example, the wife may become a best-selling author, or the husband may put a new product on the market that becomes a must for every dog owner. Because income for the suddenly solvent spouse is likely to soar, creating a postnuptial agreement now may be prudent to limit greater financial exposure in the event of a future divorce.
Divorce is becoming more common for people as they retire. Prenuptial agreements were not so prevalent a few decades ago when many of today’s retirees married, so when they divorce, they find that their finances are half of what they once envisioned. If couples agree to sign a postnup, it is a step that could protect what each has been working for throughout the marriage. It is also a good estate planning tool for protecting real property interests.
A postnuptial agreement is also popular among couples who remarry, a circumstance that often involves more mature people. In this case, one spouse, if not both, may want to ensure that certain marital assets will pass to children of a first marriage.
To be enforceable in court, a postnuptial agreement requires full disclosure of each party’s finances. It is a document that makes sense for many older couples, especially if they are in second marriages or if finances suddenly change, whether that comes through business success, an inheritance or a lottery windfall.