Postnuptial agreements – also known as postnups or partition agreements in Texas – are on the rise according to a recent survey by the American Academy of Matrimonial Lawyers (AAML). Specifically, 50 percent of divorce attorneys surveyed said they have seen an increase in postnups in the past three years.
Which begs the question: Why are more couples seeking postnuptial agreements?
According to Dallas Divorce Attorney Abby Gregory, “We have seen steady growth in the number of requests for partition agreements at Connatser Family Law. The rise could be attributed to a number of factors, but awareness is probably one of the biggest. Plus, couples’ circumstances change following marriage,” Abby says.
Societal and cultural changes may also be prompting the rise. As Abby explains, “In Texas, we see more women coming into marriages with money and entrepreneurship is also on the rebound.”
In fact, the 2015 Kauffman Index on Startup Activity reported the largest year-over-year growth in the number of startups in two decades, following a five-year downward trend.
“Our clients want to set expectations and protect their wealth – whether it is derived from an inheritance or a successful business they own,” Abby says.
According to AAML, the top areas couples address in postmarital agreements are in fact tied to wealth. These include:
- Property division (90 percent).
- Alimony/spousal maintenance (73 percent).
- Retirement accounts (45 percent).*
Occupancy of marital residence (30 percent), counsel fees (14 percent) and infidelity (7 percent) round out the top six.*
So why should YOU consider a postmarital agreement?
According to Abby, it’s a good idea to ask your divorce attorney in Dallas (or the city where you live) about a postmarital or partition agreement if you want to:
1. Define and protect your separate property.
Like premarital agreements – or prenups – a postmarital agreement can clarify who will walk away with what assets in the event of death or divorce. As Abby explains, “For example, if you invested thousands of dollars in Dallas Cowboys sports memorabilia during the marriage and want to ensure those items stay with you – not your wife – you can designate those items as separate property in a partition agreement.”
2. Protect a business you own and income associated with that business.
“If you own a business that takes off during your marriage, any income derived from that business is typically considered community property in Texas, even if your spouse has no financial interest in the business. A partition agreement allows you to segregate certain property – such as business income – as your separate property,” Abby says.
Learn how to protect your family empire with a business prenup in this past post.
3. Assure your spouse you are committed to making your marriage work.
According to Abby, “We often see couples opt for a postmarital agreement in an attempt to save a fractured marriage. It allows a spouse to say, ‘I’ll partition away this money for you today, so you know I’ll be around tomorrow.’ Partition agreements can also include ‘penalties’ to punish a spouse, should future infidelity lead to divorce.”
4. Ensure you inherit family wealth (and your spouse does not).
Face it, many families really dislike their heirs’ spouses. They may even go as far to disinherit that family member unless he or she and their spouse signs an agreement to prevent the non-heir spouse from getting access to the family jewels should the two split.
“When family wealth is involved, a partition agreement can help ensure your spouse has no right to your family’s wealth in the event of divorce or death,” says Abby.
5. Update an outdated premarital agreement – or prenup.
As noted above, circumstances change over the years. As Abby explains, “The premarital agreement you signed 10 years ago, may no longer make sense to one or both parties. Take time to review the existing agreement with your spouse, then meet with your family law attorney in Dallas, or your local area, to execute a new agreement that better aligns with your current needs.”
* Divorce lawyers surveyed by AAML could choose multiple answers for this survey.