When it comes to marital finances, usually we think of three major types of contracts between spouses: prenuptial or antenuptial agreements entered into before a marriage, postnuptial agreements in the absence of a divorce/dissolution and separation agreements incident to a termination of marriage in Ohio.
Most readers have likely heard of a prenuptial, or antenuptial, agreement. Also known more casually as a “prenup,” this agreement is used to clarify – before the nuptials – how certain assets and liabilities will be divided if the marriage ends in divorce or upon death. Romantic, right? But it can be a very useful and important tool.
A prenuptial agreement may also specify what spousal support will look like upon a divorce, and how certain assets will be treated upon the death of one party. It is most often used to protect assets that a party brings into the marriage, but it can also be used to protect a spouse against the debt of the other. And, it can also be used to protect the inheritance of children from a prior relationship.
If you are considering a prenuptial agreement, you will want to keep a few points in mind. First, it is important that both sides make full disclosure to the other of all assets and liabilities. This disclosure should be embodied in the document, usually as an attachment. Second, the other side should have a meaningful opportunity to read, review, and understand the document, and to consult with an attorney prior to signing.
It is important that the document be signed of each party’s own free will, without any fraud, duress or coercion. Please do not surprise the other side with a prenup two days before the wedding. Third, the terms of the agreement cannot encourage profiteering from a divorce. Fourth, know that spousal support terms contained in a prenuptial agreement are not necessarily binding if they are unconscionable at the time you are seeking to enforce them.
But what if you failed to get a prenuptial agreement before the marriage? Maybe the marriage is on rocky ground and it seems like a good idea to get some things in writing. Perhaps you want to take some of your premarital money or inherited money and use it to purchase a marital home and you want to make sure you are able to get it back if you divorce. Maybe you want to go into business with a family member and you want to clarify how that business will be treated.
All of those and more are reasons that have prompted couples to think about postnuptial agreements. It may sound tempting to whip up a quick contract that both spouses will sign. After all, a signature is binding, right? Not so fast. You will do much better to document any of these types of events and keep financial records in case they are ultimately needed in a court case, as postnuptial agreements simply are not valid in Ohio.
A notable exception to this rule is an agreement for purposes of separation. Generally used for a settled divorce, dissolution or legal separation, a separation agreement will typically encompass some agreement on all financial terms, including division of assets, debts, and other financial issues, and any ongoing financial support. That agreement will then be enforceable in the divorce court and will be attached to any final decree.
This article originally appeared as a column for the Cleveland Jewish News.