From time to time, I receive phone calls from potential clients who just want a “simple” postnuptial agreement. Usually, the situation involves an inherited business or other income-producing property—or some other (usually unforeseen) life-changing event that significantly impacts financial circumstances. Usually, the caller has briefly discussed the situation with his or her spouse and the spouse isn’t really on board, but the caller thinks a “simple” document may seal the deal.
If only life were that easy. In Minnesota, a postnuptial agreement is a contract between married persons to determine what rights each party has to property in the event of divorce or death. It is different from, for example, a will, since a will can be changed unilaterally. A postnuptial agreement cannot. Postnuptial agreements can also address circumstances such as spousal maintenance and the right to use property during and after marriage. However, it cannot determine child support, child custody or parenting time rights.
Seems simple enough. But there are serious complexities involved. For instance, a postnuptial agreement is presumed to be unenforceable if either party commences an action for a legal separation or a divorce within two years of the date of its execution, unless the spouse seeking to enforce the postnuptial contract or settlement can establish that the postnuptial contract or settlement is fair and equitable. Also, in order for a postnuptial agreement to be valid and enforceable, at the time of its execution each spouse has to be represented by separate legal counsel. This obviously complicates matters.
Further complicating matters is that for a postnuptial contract to be valid, it must also comply with all of the requirements for an antenuptial agreement (an agreement signed prior to marriage) including the requirements that it be both procedurally and substantively fair and equitable both at the time of its execution and at the time of its enforcement. This is a significant burden that also requires a full and fair disclose of all assets, income, and debt in order for the postnuptial agreement to be valid. As a result of this, many people simply give up and do not move forward with a postnuptial agreement. However, in some cases, if the proper disclosures and other items are included, such as both parties having an attorney, the document can be well worth the cost and expense.
Know too that sometimes there are other documents or ways to accomplish the same or similar goals, or at least mitigate some of the risk of not having a postnuptial agreement without actually having to draft the document. So, a conversation with an attorney about what it is that you are looking for and how to go about making it happen is worthwhile.
Andrew M. Tatge is Gislason & Hunter’s Managing Partner and chair of the firm’s Family Law and Divorce Practice Group. He represents farmers, business owners, professionals, and other individuals in divorce and related actions. He also writes and speaks regularly on divorce issues related to business owners and family farms. Andrew can be reached at firstname.lastname@example.org or (507) 387-1115.