Defining a Postnuptial Agreement
A postnuptial agreement is a contract made between married spouses to clarify the management of assets and/or support obligations should a separation or divorce occur. They essentially serve the same purpose as a prenuptial agreement but for couples who have already tied the knot. They continue to be a point of focus in states such as Missouri and may be more beneficial to spouses than they realize.
Not every couple is a good candidate for a postnuptial agreement. In some cases, Missouri spouses have no assets to split up; they may be young and do not yet have a substantial estate . For other couples, a postnuptial agreement may be prudent after the acquisition of a significant asset, such as a new home, a promotion or a business venture.
In Missouri, these agreements are still relatively new. However, in circumstances such as when one or both spouses did not enter into a prenuptial agreement before marriage, or if the couple did not think a prenup was necessary, they may wish to create a postnuptial agreement long after their vows to ensure that their conjugal rights and interests are legally protected.
A postnuptial agreement could also benefit a spouse when faced with circumstances that could lead to marital breakdown, such as an extramarital affair or addiction.
Basic Requirements for Postnuptial Agreements in Missouri
The legal requirements concerning postnuptial (and prenuptial) agreements are found in the Uniform Premarital Agreement Act. While the Act does not specifically refer to postnuptial agreements, the statutory requirements are the same. Section 451.1002 of the Missouri Revised Statutes states, "Marital property agreements are enforceable without consideration." In other words, marital agreements are enforceable without any exchange of money or other "consideration." The enforceability of a marital agreement is not dependent on any exchange of consideration; therefore, a postnuptial agreement can be entered into and enforced without any money changing hands.
Like a prenuptial agreement, however, for a postnuptial agreement to be enforceable in Missouri, it must be signed by both spouses and include the following:
In addition, the postnuptial agreement must be "voluntary." That means that both spouses signed the agreement and did not do so for any "fraud, duress, misrepresentation, or mistake" of the other spouse.
A court may set aside a marital agreement if it finds that:
One common misconception about marital agreements, whether prenuptial or postnuptial, is that you have to have the same amount of assets before and after signing the agreement. That is not the case – you can have unequal assets before and after signing the agreement. The important thing is that each spouse signs the agreement voluntarily and that it meets all the requirements of the law in Missouri as described above.
The court will not review the substantive terms of the agreement, such as the division of assets or spousal support (alimony). However, like any contract, a marital agreement cannot violate public policy, such as preventing one spouse from having custody of any children. In actuality, the courts will not even consider whether the agreement is fair or unfair in the eyes of the court.
Advantages of Postnuptial Agreements
For married couples, a postnuptial agreement is a tool that can clarify financial responsibilities and plan for future financial matters. Like prenuptial agreements, they can protect an individual’s interest in property should the couple separate or divorce, career-related compensation such as pension or retirement benefits, and protect one spouse from liability for the other spouse’s debts.
Like any contract, a postnuptial agreement requires disclosure of assets and debts as well as an understanding of the rights each party is giving up pursuant to the contract, but these agreements can sometimes avoid costly disagreements over finances during a divorce. Furthermore, should the terms of the agreement be violated during marriage, the other spouse may be able to revisit the issue during negotiation or aggressiveness during litigation might result in the terms being included in a divorce settlement. That said, having a postnuptial agreement does not mean a divorce is imminent: a postnuptial agreement is, however, an effective way to provide clarity in a marriage.
Succinctly speaking, the benefits are:
• Financial clarity
• Protection of individual financial interests
• Clarifying and setting expectations
• Protecting the welfare of children
• Peace of mind
Typical Provisions Found in Missouri Postnuptial Agreements
In Missouri, most postnuptial agreements that are entered into before the divorce or while the divorce is pending contain provisions which address the division of marital property, spousal support or alimony, and debt allocation. For agreements entered into after the divorce is finalized, post-nuptial agreements typically address the obligation to pay alimony or spousal support and other issues which can be addressed by an agreement. The agreement may contain a specific clause detailing out the division of marital property such as a specific house or vehicle. It may also provide for the division of a business interest, investment account, 401(k), or retirement account. The agreement normally details any spousal support obligations, including the term (if any), amount of payment, and to whom the obligation is owed, but it also may address maintenance and support terminable upon the occurrence of some condition such as a remarriage or cohabitation with a person of the opposite sex who is not legally a relative. Most agreements provide for the equitable division of debt. It may allocate the payment of child support or other obligations to each spouse.
Limitations and Complications
Any number of challenges could be launched against the enforceability of a postnuptial agreement. The agreements must be entered into voluntarily and must be accompanied by full and frank disclosure of all assets and debts. If either party fails to fully disclose assets and debt, or if fraud occurred in the elimination of assets prior to the drafting of the agreement, or if an asset was concealed by one party , then the agreement may be challenged while being marred with potential issues of unconscionability. An unconscionable agreement is one that is so unfair to one of the parties that it shocks the conscience of the court.
The agreement must be drafted clearly and be unambiguous. An agreement that is poorly or vaguely drafted could be invalidated. The agreement must be equitable and must not be unconscionable. An agreement that leaves one spouse with considerably more or fewer assets could also be challenged by a court on grounds of unconscionability.
While there is no absolute prohibition against any negotiated contract having to be probated, the practical effect of a well-negotiated postnuptial agreement is that the divorce is much more streamlined. This means that the parties can retain more of their marital assets, netting both spouses more amicable, satisfactory results in the dissolution process from the very start.
Creating a Postnuptial Agreement in Missouri
In Missouri, the process of creating a postnuptial agreement begins with both spouses reaching an agreement on the terms of the document. Although a formal contract is not legally required, it is always recommended that both spouses get independent legal advice about the agreement. This is especially important in the event there are children from the marriage, because the process of drafting the agreement should include an examination of child support obligations under Missouri law. The involvement of an experienced family law attorney can help spouses avoid future disputes by ensuring child support amounts calculated accurately take into account the needs of the children.
Creating a postnuptial agreement typically involves the following steps:
Although it can be tempting for married couples to write their own postnuptial agreement, Missouri statute does require that any changes in the rights or obligations of either spouse under the law be supported by the consideration of an exchange of more than nominal value. A simple "mommy I love you" and "daddy I love you too" may not be sufficient. The exchange of value could be a change in one spouse’s salary, an increase in a business’s value or a gift from one spouse to another. In some cases, a spouse may write a postnuptial agreement and provide nothing in return for household duties such as cooking and cleaning. This will not be enough to create a binding postnuptial agreement.
Finally, a signed postnuptial agreement must be filed with the circuit clerk of the county where the married couple resides or had resided during the last two years of the marriage. If the court does not have jurisdiction over the agreement, it is not enforceable.
Consulting with an Attorney
Seeking legal advice for postnuptial agreements is crucial to ensure that the contract is fair, clear and legally binding. A skilled St. Louis postnuptial agreement lawyer will work with you and your spouse to help ensure that the agreement you draft is in your interests as well as in the interests of your spouse. Your attorney can also help you negotiate if postnuptial agreements are new territory for you and your spouse or if you are unsure of whether entering into a postnuptial agreement is in your interests.
A St. Louis postnuptial agreement lawyer will work with you to discuss your concerns , your hopes for the future and any potential concerns you may have about how the agreement would affect you. By sharing this information with a qualified attorney, you and your spouse have a much better chance of receiving the result that you want with your agreement.