A postnuptial agreement, commonly known as a “postnup,” is a legal document created by a couple after they’re married. It’s a contract that outlines how financial matters will be handled in the event of divorce or separation or the death of one spouse. Unlike a prenuptial agreement, also known as a “prenup” — which a couple signs before they’re married — a postnup is drafted and entered into after they’re wed.

Why would a couple create a postnuptial agreement? Let’s explore what this contract covers and some common reasons it’s created.

How does a postnuptial agreement work?

A postnuptial agreement’s primary purpose is to establish clear guidelines for the distribution of assets, debts and other financial matters. A postnup may include directives outlining how things like child custody and alimony will be handled, as well as:¹

• What is marital vs. separate property and how marital property would be divided in the event of divorce.
• What will happen to marital property if either person dies.
• When and if either spouse will receive alimony and how the amount of spousal support is calculated.

Postnup vs. prenup

Postnup and prenup agreements are both legal documents that address what will happen to a couple’s assets if marriage (or the promise of a marriage) ends. The primary difference between the two is that couples can enter into a prenup before marriage or a postnup after marriage. A postnup can also be used to modify terms in a couple’s prenup agreement.²

Reasons to get a postnuptial agreement

A postnup agreement can help provide financial protection and direction if:³

• You don’t have a prenup. If you initially didn't want a prenup or didn’t have a chance to draft one, you can create a postnup to help safeguard your interests after marriage. This may be particularly important if your financial circumstances have changed during your marriage.
• You have children from a previous relationship. If you have children from a previous relationship, a postnuptial agreement can help protect their interests. A postnup may be a beneficial estate planning tool that can help ensure your children receive their share of inheritance in the event of a death or separation. By clearly outlining how assets will be distributed, the postnup helps create a safeguard for your children’s well-being.
• Your financial situation has changed. If your or your spouse’s financial situation has changed significantly since getting married, you may want to address and outline the new circumstances in a postnup. Whether it’s an increase in income, a lottery win, or a large inheritance, a postnup can clarify how assets and other financial aspects will be handled. This might help prevent conflicts and ensure both partners are on the same page regarding any updated financial responsibilities.
• You or your spouse own a business. If you or your spouse own a business or plan to open one, a postnup can create a framework for how the business assets will be managed if the marriage ends. For instance, it may prevent an ex-spouse from claiming a share of the business's earnings or asserting ownership rights.
• You or your spouse leaves the workforce. If one partner decides to leave the workforce and stay at home, a postnup can help make sure the non-working spouse is financially prepared if their marriage ends. It can outline how they'll get financial support and access to marital assets.

How do I get a postnuptial agreement?

You and your spouse can create your own postnuptial agreement, but having it drafted by a legal professional, such as a divorce lawyer, can help ensure it’s compliant with state laws. In fact, some states require that each party has its own legal counsel, to make sure both spouses fully understand their rights.³

Although laws may differ by state, most postnuptial agreements:

• Must be in writing; oral contracts are not enforceable.
• Must be entered into voluntarily by both parties.
• Require full and fair disclosure of relevant information at the time of execution.
• Must not include terms that are unconscionable, unjust, or one-sided in nature.
• Must be signed by both parties. After the contract is reviewed and signed by the couple, the postnup becomes legally binding.

How long after marriage can I get a postnuptial agreement?

There are no time limits for creating a postnup. Whether it’s days or years after you’re wed, you can draft and sign a postnuptial agreement anytime. As long as it meets state requirements, courts will most likely deem it valid.

How much does a postnuptial agreement cost?

The cost of a postnuptial agreement will vary depending on several factors, including the complexity of your case, where you live and the legal fees charged by the attorneys involved. Attorneys typically charge hourly fees for postnuptial agreements.

How a legal plan can help with the postnup agreement process

Consulting with a lawyer can help simplify the postnup process and ensure the agreement is legally valid and enforceable. If you’re interested in hiring a lawyer, legal insurance can provide a cost-effective avenue to legal services. Check with your plan to make sure it covers the services you need.