The concept of pre-nuptial agreements is widely known. However, there is another type of agreement that spouses may utilize in order to order their marital and separate property in the event of divorce. These agreements are known as post-nuptial agreements.
What is a Post-nuptial agreement?
Similar to pre-nuptial or ante-nuptial agreements, post-nuptial agreements are legal agreements entered into by both spouses during the marriage that spell out how assets or debts will be divided in the case of divorce or death. Essentially, these agreements are pre-nuptial agreements that are signed after the marriage has occurred. Couples may seek post-nuptial agreements for all of the same reasons that a couple would seek a pre-marital agreement. Couples make take this option because a pre-nuptial agreement was not necessary or not considered prior to the marriage.
Why would a couple enter a post-nuptial?
Couples often seek to enter into a post-nuptial agreement as the result of a major financial change that happens during the court of their marriage, like the occurrence of an inheritance or the immense success of a business. Additionally, couples with blended families may which to enter into a post-nuptial agreement in order to safe guard the inheritance of biological children. For example, a post-nuptial agreement may mandate that a mother's assets pass directly to her biological children, not the her step children, or a husband can limit the total amount his wife would receive from his business assets in case of divorce. Post-nuptial agreements may also be used by couples to protect one spouse from any financial obligations from a judgment against the other spouse or his or her business.
Are post-nuptial agreements enforceable in Georgia?
Georgia has a public policy which favors the enforcement of pre-marital or post-nuptial agreements. However, a court must analyze the agreement according to the three criteria listed below before the agreement may be enforced:
1) Was the agreement obtained through fraud, duress or mistake, or through misrepresentation or nondisclosure of material facts?
2) Is the agreement unconscionable?
3) Have the facts and circumstances changed since the agreement was executed, so as to make its enforcement unfair and unreasonable?
See Blige v. Blige, 283 Ga. 65 (2008); Mallen v. Mallen, 280 Ga. 43 (2005); Gravley v. Gravley, 278 Ga. 897 (2005); Sanders v. Colwell, 248 Ga. 376 (1981).
Ways to Bring up the topic of a post-nuptial agreement with your spouse
If you believe that entering into a post-nuptial agreement with your spouse is necessary or may be beneficial for financial planning purposes, the following suggestions may be helpful is discussing this topic with your spouse:
• Make it about "us", not just about “you”. Initiating a conversation about a post-nuptial agreement may not be the most pleasant task; however, ensuring that your spouse understands that the prospect of a post-nuptial agreement is something that can be of benefit to you both may ease any tension caused by the conversation.
• Use changes in circumstances to your advantage. If you or your spouse have recently received a big bonus, new job, or an inheritance, that may be the prefect event to trigger a conversation about a post-nuptial agreement.
• Suggest it as an update to your pre-nuptial agreement. If you signed a pre-marital agreement, suggest that you and your spouse review it together to determine if it still seems fair and reasonable to both of you.
• Discuss it while discussing other financial-planning essentials. Creating a will or engaging in estate or financial planning provide a nice segue into a discussion regarding post-nuptial agreements. Remember these agreements may be used as highly effective financial planning tools to protect your children’s inheritances or family businesses.
• Have your attorney or family planner bring it up: A neutral adviser may ease the tension or emotional response that may arise out of a discussion concerning a post-nuptial agreement.
By A. Latrese Martin, Associate Attorney, Meriwether & Tharp, LLC