What is a Postmarital Agreement?
A Postmarital Agreement, sometimes called a Postnuptial Agreement, is a set of rules created by a couple during their marriage for many of the same reasons that an engaged couple creates a Premarital Agreement: to govern their financial lives during their marriage and to determine what will happen in terms of property division if they should divorce. There is an ongoing debate as to whether or not married couples can create their own enforceable rules regarding spousal support; you should discuss this with your mediator and/or your consulting attorney if this is something you’d like to include in your postmarital agreement. They also believe that they can create their own rules to fit their unique situation, rules that will be preferable to those imposed by California Family Law.
There is an additional enforceability hurdle for couples wishing to enter into a Postmarital Agreement: as spouses, they are subject to a set of fiduciary duties that do not exist for fiancés. These, among others, include the duty not to take financial advantage of the other spouse. A Postmarital Agreement, since it usually includes some circumventing of community property law, is going to be subject to a presumption that one spouse is taking advantage of the other.
So while Postmarital Agreements do not appear to be expressly governed by California Family Law section 1600, case law has confirmed that the same rationale applies when enforcing them: each party must sign “freely, voluntarily and intelligently.”
In order to avoid the presumption of unfair advantage, most professionals believe that it is imperative that both spouses be represented by attorneys and that all steps be taken to show that both spouses signed the agreement freely, voluntarily and with full knowledge of rights he or she could be giving up.
Why Have a Postmarital Agreement?
Sometimes there is not enough time before the wedding to create a Premarital Agreement, so the couple waits until the flurry of wedding activity has died down and works on the agreement after their marriage takes place. Sometimes things happen that change a couple’s finances during their marriage; for example, one spouse may wish to protect his or her newly inherited separate property or one spouse seeks to be protected from the other spouse’s debt. Because there may be differences in the enforceability of Premarital Agreements vs. Postmarital Agreements, it is a good idea to get legal advice, if time permits, before choosing to forego a Premarital Agreement in favor of creating a Postmarital Agreement during the marriage.
What Does the Process Look Like?
Before a first draft is created, both parties are provided with their “default” Postmarital Agreement (according to existing California Family Law), which sets out the rules that would apply if they did not create their own Postmarital Agreement.
In mediation, the couple meets with the mediator together - in the collaborative process both parties and their respective attorneys meet together - to discuss which of the “default” community property, separate property and/or spousal support rules the couple wishes to modify in order to respect the following:
Each person’s goals for the marriage;
Each person’s goals for himself or herself;
Each person’s goals for the other person;
Each person’s concerns giving rise to his or her belief that a Premarital Agreement is needed; and
Each person’s concerns about the consequences of a Premarital Agreement in terms of his or her own need for security and for being cared for by the other person.
The mediator or one of the collaborative attorneys usually drafts the Premarital Agreement based on discussions with the couple, and presents the first draft to the parties for their review and comments. Once the couple has provided their input, the Agreement is finalized.
In the Collaborative Process, each party has his or her own attorney to provide advice and support. In mediation, because of the stringent requirements for enforcing these Agreements, most professionals prefer that both parties have their own advising attorneys to educate them as to their legal rights, to support them in the process, to review the final Agreement with the client, and to countersign it.
In the event the couple chooses to attempt to limit spousal support, which may or may not be enforceable in the future, most professionals agree that it is mandatory that both parties have their own attorneys, and that these attorneys sign the final Agreement.
What About the Rest of the Team?
In a mediated or collaborative Postmarital Agreement process, adding professionals other than the attorneys to the team can enhance the process and strengthen the relationship. Working with a financial professional can help the couple understand their finances and make better plans and rules to live by—and also take the fear out of the commitment they are making and the Agreement they are drafting. Working with mental health professionals in the process can prepare the couple for healthier negotiations and for their new life together, particularly when they are blending families and working with difficult emotional issues in the drafting of the Postmarital Agreement.