postnap

When Maria and Charlie decided to get married, they had already been together for nine years. During their relationship, they kept separate finances and split their expenses 50-50. Charlie, 29, a doctoral student, says, "We had our own inheritance. Because they each had an inheritance, Maria, also 29, suggested they enter into a prenuptial agreement. (They use pseudonyms to protect their privacy.) Maria said she thought that a prenuptial agreement would allow the couple to "get into the details of each other's finances" and facilitate discussions about their financial goals and values. But like many couples who married during the COVID-19 pandemic, they scrambled to secure marriage licenses and remote court dates. Says Maria, "In the end, we didn't have time to work out everything we thought we needed to work out before we got married, including prenuptials." Maria says.

Prenups are becoming increasingly common, especially among people aged 25 to 40; about half of the attorneys surveyed by the American Academy of Matrimonial Lawyers said they are seeing an increase in prenuptial agreement requests from millennials. This demographic is marrying later, has significant student loan debt, and is experiencing firsthand how financially devastating divorce can be: nearly four in ten millennials are growing up in divorced or single-parent households, a higher number than any previous generation. Nearly 4 in 10 Millennials grew up in a divorced or single-parent home, a higher number than any previous generation. It is no surprise that millennials are scrambling to protect themselves when it comes to their unions.

But what about couples who want to settle their financial affairs after walking down the aisle? A postnup, or postnup, is a contract signed after marriage that gives instructions on how to handle financial matters in the event of divorce. This includes assets, debts, childcare and custody, gifts, and even pets. Essentially, it is a prenuptial agreement for married couples, which can do all the things a prenuptial agreement can do, but can be signed at any time during the marriage. But once you're married, there's not much bargaining power if you and your partner don't agree on terms, warns Emily Pollock, a partner at the New York law firm Kasowitz Benson Torres. She had drafted a prenuptial agreement for a couple who had a disagreement over a gift from a family member. Then, because of COVID, the two had a last-minute wedding. Now that there is no deadline for the wedding, postnup negotiations are complicated. Says Pollock. They're already married,

"Most people just don't know postnups exist," says financial expert Erin Lowry, author of the Broke Millennial series. Those who do may find postnups distasteful. Lowry says she is not surprised that postnups are taboo."

"If prenups are still discussed by most people in hushed tones, can you imagine (talking) about a document spelling out the terms of a split after you are already married?

Contrary to the dicey image, there are many reasons why postnups may be effective for couples who are not planning to divorce. The motivation may be a major life change or unexpected good fortune. A spouse may have to retire and move away (to a lower-paying job) in order to get the job of his or her dreams. It might be that your partner starts a business and wants you to protect him or her when that business goes bad. Leslie Geller, a wealth strategist at Capital Group and former attorney, says she often deals with postnups when there have been major changes in the family finances since the beginning of the marriage. "If you get married in your late 20s or early 30s," she says, "before you have kids and before you make a significant amount of money," she says, "five or 10 years into the marriage, you start to think really differently about assets and about the marriage itself. Kelly Flory, a partner at a New York law firm specializing in family and matrimonial law, recently created a postnup for couples buying a home. One spouse's parents had gifted the down payment and wanted to ensure that the gifted money would be passed on to the children at the time of divorce.

For many couples, children are the reason they seek postnups. When San Francisco entrepreneur Doreen Bloch became pregnant, she and her boyfriend Jeff spontaneously decided to get married. We just went to a nearby courthouse on a Friday morning," says the 33-year-old Bloch, founder of a data analytics firm. She and Jeff, also 33, keep their finances separate, but California law states that all assets must be divided equally in the event of a divorce. They began considering a prenuptial agreement because of her business and her parents' experience with divorce. Says Bloch, "My parents went through years of terrible court battles to get their divorce finalized." It was important to her that if she did end up divorcing, she and her partner were on the same page."

For Melissa Niekert, a 34-year-old financial and travel writer, Postnap protects the child she had with a previous relationship. She and her husband travel frequently for work and do not want their location to dictate the distribution of their assets. '(It) doesn't judge our commitment,' she says. 'Postnup just decides that we want to have a say in what happens.'

Even if you already have a prenup, you may want to consider a postnup. Says Geller, "Prenuptial agreements cover very limited situations." When a couple enters into a prenuptial agreement, that agreement is based on certain facts, such as family circumstances, current assets, presence of children, and employment. Geller says, "The validity of that particular prenuptial agreement fades as time passes and circumstances change."

Beyond being a legal document, a postnup is a framework for tough conversations about money, goals, and partnership. Self-help author Annmarie Kelly treats her postnup like a marriage contract and reviews it regularly with her husband; Kelly, in her 60s, says that when her now husband proposed marriage, she was reluctant: "I didn't want to lose my sense of freedom and independence." Eventually she agreed, but with a caveat. 'Certain marriage contracts were about our business and our money. One marriage contract was about our business and money. Another marriage contract reflected our way of life after a rough period, expectations, respect for values, and logistical support for household chores like cleaning up after ourselves.

Of course, postnups are not a cure-all for marital money woes. Says Flory, "If you're trying to enter into an after-the-fact agreement just because the other person might divorce you, that's a big problem." He recommends that couples make sure they are on the same page before consulting an attorney. For newlyweds Maria and Charlie, the discussion about postnups cast a negative light on the state of their brand-new relationship. Says Charlie, "We had just gotten married, so Maria's excitement about postnups was kind of painful." But Maria, who grew up in a household where one parent managed the finances, wanted something different from her marriage. 'My mother has to pay for big purchases,' she says. For her, that dynamic is not something she enjoys." Charlie eventually realized that postnups could help the two of them more easily share the family finances."

"Knowing that no matter how much [of your estate] you spend on joint purchases, you never relinquish control of it, you can rest assured that it will be there when you need it. [Like life insurance policies and wills, postnups "should be a routine part" of economic life, says Lowry. For Bloch, financial protection is important no matter how remote the possibility of divorce. She says, "We all want our marriages to last forever, and no one wants to think about divorce, but divorce is really common and circumstances change." "It's important to protect your hard-earned assets."

Build trust and security by talking about the history of money. Start with how you feel about how your parents handled money and how it affected their lives.

Clarify your financial situation. This includes income, expenses, assets, liabilities, credit score, etc, This includes credit scores, etc.

Narrow down your top individual and joint goals and how to achieve them. Are there any circumstances where one spouse will have to make major sacrifices?

Develop and implement a plan. Conduct regular check-ins and annual reviews.

Source Adam Coll, host of the podcast Couples Financial Coach

This article appears in the Summer 2021 issue of Marie Claire.

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