What is a Post-Nuptial Agreement?
A post-nuptial agreement, as the name implies, is an agreement entered into by spouses either during the marriage or after the marriage has concluded. It can address many of the same categories that a pre-nuptial agreement would cover.
Many couples in Ohio elect to enter into post-nuptial agreements for a number of reasons. For example, if there is a dispute over a particular issue in the marriage, creating a formal agreement, even on a temporary basis, can bring about more predictability. A parent and/or spouse may also be concerned about the withholding of child support or maintenance payments by a former spouse . This concern could be even stronger in the case if the former spouse moves out of state. A post-nuptial agreement would provide a blue-print for what the former spouse would owe on a monthly basis.
In Ohio, a valid post-nuptial agreement must: 1) be in writing; 2) signed by both parties and 3) entered into voluntarily. In addition to these requirements, as with pre-nuptial agreements, Ohio cases have established that a post-nuptial agreement cannot be used to adversely affect the rights of a child or interfere with pending divorce action.
Formalities in Ohio
Legally, a post-nuptial agreement in Ohio must be in writing and signed by both parties. The primary state statute governing post-nuptial agreements is the Ohio Revised Code Section 3103.06, which sets forth the statutory provisions applicable to spousal contracts, including post-nup agreements. Notably, the statute provides that every contract made between married persons with respect to the discharge of marital rights, or in consideration of marriage, whether before or after marriage, must be in writing, signed by the party to be charged therewith, and in presence of two witnesses.
There are no filing procedures relevant to post-nuptial agreements. While there may be some dispute as to whether a post-nuptial agreement is treated as an enforceable contract if the subject matter of the agreement involves a waiver of statutory spousal rights, the more well-reasoned approach by Ohio courts is that spousal contracts relating to property are not unenforceable, but rather are treated like any other contract. The agreement must still be supported by consideration, but a marital relationship is sufficient consideration for a post-nup agreement. A post-nup agreement is not subject to the statute of frauds, as it does not transfer real property based solely on verbal statements or discussion. In Ohio, for all intents and purposes, a post-nup agreement is treated as a valid, enforceable contract that is supported by consideration and meets any relevant statute of frauds requirements.
When it comes to enforcement, post-nup agreements will typically be upheld unless the party challenging the agreement can show (1) the existence of coercion, fraud, undue influence, or misrepresentation; (2) the agreement is unreasonable or unconscionable (an overly one-sided agreement that greatly favors one party); and (3) the agreement was not entered into voluntarily (i.e., the agreement was not entered into of one’s free will).
Typical Provisions in Post-Nuptial Agreements
Post-nuptial agreements in Ohio usually contain several common clauses. In addition to the identification of the parties and a recitation of the marriage, terms typically include a statement that each party is of sound mind and body and are entering into the agreement freely.
The first common provision addresses property division. A listing of separate and marital assets is typically contained within this clause. The post-nuptial agreement can also detail whether the parties wish to keep certain assets "separate." This would mean that if you were to divorce, that asset would remain separate. If there is no qualification in the clause, then you can assume that this asset is marital and intended to be split equally at the time of a divorce.
The second clause in post-nuptial agreements addresses debt allocation. The parties may wish to keep separate their responsibility for a mortgage or student loans. Before signing a post-nuptial agreement, you should review your credit score and any debt you have. Your spouse may have a lower credit score due to a credit card charge off prior to marriage. Keeping that charge off separate will assist in better terms if you decide to purchase a new home, for example.
Third, there may be alimony or spousal support terms. Are both parties waiving their right to spousal support or just one party? Are the terms of spousal support detailed? Are there terms regarding how spousal support should end, such as remarriage or cohabitation?
Finally, there are usually clauses dealing with any future children. Is there a term detailing that current income is not enough for spousal support, but that that may change if you make more money in the future? Is there a schedule for when child support can be modified if your future income increases substantially?
Advantages and Disadvantages
Online sources often overlook the dangers and pitfalls of a post-nuptial agreement in Ohio. In reality, while these agreements are generally helpful (if not essential), they involve some risk. If either party is especially wealthy or has a low earning spouse, a post-nuptial agreement makes a lot of sense. It establishes the rules and amounts for economic support in advance of the situation. Most often, if the marriage goes bad – there’s no fixed support terms in place. Equally interesting (from a legal perspective) is that a post-nuptial agreement can have a positive impact on some couples. It can stabilize the union. Finally, it does provide clarity if a divorce becomes necessary. However, you should know the following downsides: – Post-nuptial agreements lack binding legal authority- meaning, the court can always make the final call. In major litigation, a judge is only responsible to deliver fair justice. That means, if the judge sees things radically different, the court’s judgment will reign supreme. – While the judge may attempt to honor the contract (the agreement)- there are no guarantees. All evidence will be considered: economic circumstances, child care needs, etc. Even a perceived unfair distribution may be reversed. – A post-nuptial agreement may be disproportionately favorable to the wealthier spouse. These things are almost always one-sided in nature (meaning, the producing party is usually able to customize the agreement). – Finally, the last major danger comes from how the agreement was developed. If there was any undue pressure or duress involved – the agreement is void. The most common situation takes place when the wealthier spouse, having married with a home and assets in the mix, chooses to draft an agreement months (or even years) afterward. – When children are involved, this dynamic increases. The spouse with access to the children may try to leverage the custodial benefit in a way that compels the other parent to sign a post-nuptial agreement. Regarding this issue, a California tax attorney, Nita Silva, notes this danger for moms and dads: "In extreme circumstances, one spouse may wish to receive a tax break by filing MFS (married filing separately) and may agree to keep the kids at home for 11 days or so to avoid the residency requirement for federal tax purposes; yet may be forced into making travel plans for the kids, which may have originally been set for the end of the year when the agreement is to go into effect. …once the agreement is entered into, it may change one’s willingness to divide assets more equitably when filing for divorce."
Difference Between Pre and Post Nuptial Agreement
The critical difference between a pre-nuptial and post-nuptial agreement is timing. A pre-nuptial agreement is drafted and executed between two parties prior to entering into Marriage. A post-nuptial agreement is drafted and executed by parties sometime after Marriage.
There are three primary reasons for a pre-nuptial agreement:
- Prior to entering into a Marriage, Parties are often reluctant to speak about the possible end of their relationship. A pre-nuptial agreement allows those conversations to happen in a neutral setting.
- Parties who marry are about to embark on a financial relationship. A pre-nuptial agreement provides each party with an understanding of the other’s assets and debts at the time of the Marriage .
- Individual assets would be protected in the event of divorce.
There are three primary reasons for a post-nuptial agreement:
- More common issues occur after Marriage, i.e., one or both parties have acquired significant debts or assets.
- If the relationship improves after Marriage, there is no reason for Divorce and/or dissolution. A post-nuptial agreement can identify joint ventures which would be taken into account in the event of Divorce at a later date.
- In some extreme circumstances, one spouse’s expenditures endanger a couple’s joint finances.
In either context, each party must have a full and realistic disclosure of each other’s finances.
How to Draft a Post Nuptial Agreement
A. Step One: Discuss the Post-Nuptial Agreement with Your Spouse
Once you have identified your goal in having a post-nuptial agreement, the next logical step is to discuss the idea with your spouse. If you are considering having a post-nuptial agreement to address financial measures in order to seek a mortgage, your spouse may not be as concerned with the idea as you are.
If you are considering having a post-nuptial agreement in the event that you should divorce, your conversation may be more difficult. However, if you are open and honest, your spouse may be more agreeable than you think.
B. Step Two: Prepare an Outline of Your Provisions
This step is important because understanding your goals for the agreement will help your attorney draft a more comprehensive post-nuptial agreement.
C. Step Three: Seek Legal Counsel and Begin Drafting the Agreement
Having an experienced family law attorney assist with the drafting of the post-nuptial agreement is highly recommended. Taking a DIY approach may save some money upfront; however, you will likely have questions about the agreement and it may not be as comprehensive as it should be. An experienced family law attorney can identify unusual circumstances, find potential red flags, and ask the right questions in order to help you develop a stronger agreement.
D. Step Four: Review the Agreement and Make Changes
You or your attorney may wish to revisit the document once drafted and put into place. It is not uncommon to have multiple revisions of the post-nuptial agreement before both parties are satisfied.
E. Step Five: Finalize the Post-Nuptial Agreement
Once both parties have finalized the post-nuptial agreement after reviewing it in-depth, you can move forward and sign the document. At this time, you may also consider filing the document with your county’s court house.
If you are considering entering into a post-nuptial agreement in Ohio, you should seek the legal counsel of an experienced attorney as soon as possible.
Enforcement of a Post-Nuptial Agreement
Enforcement of Post-Nuptial Agreements: Essential Information for Ohioans
Ohio courts generally do not have the power to divide property following a marriage. A post-nuptial agreement is one way around that limitation. Under such contracts, spouses agree on ownership and distribution rights to property, debt and maintenance obligations, similar to a pre-nuptial agreement.
For a post-nuptial agreement to be enforceable in Ohio, it must adhere to certain requirements:
— The agreement cannot affect child support or custody.
— It must be in writing.
— Both parties must voluntarily sign the agreement.
— It must be signed by two disinterested witnesses .
— The agreement must be made a part of the court record by incorporation into a decree or journal entry.
— The agreement must be "fair" and "reasonable" (the court reviewing the agreement’s circumstances regarding relative assets and debts, and the availability of adequate and equitable relief in the event of a divorce).
The court has the authority to enforce a provision of the post-nuptial agreement that does not consider the best interest of children, but the court may not enforce provisions concerning child support, parenting time, medical rights and responsibilities, and child custody.