Defining A Post-Nuptial Agreement
Before discussing post and pre-nuptial agreements, it is necessary to clarify what these documents are and how they work. A post-nuptial agreement is a formal agreement between a husband and wife, which provides that in the event of a separation or a divorce, certain conditions will apply and have priority over Washington law rules concerning property ownership and/or support and maintenance provisions. A post-nuptial agreement may deal with issues related to the economic relationship between a husband and wife, including the division of property, insurance, maintenance obligations and retirement benefits. In general, the purpose of the agreement is to provide that all previously acquired property, which is individually owned by one spouse, will remain the individual property of that spouse in the event of a separation or a divorce. A post-nuptial agreement may also set out how a marital estate created during the marriage will be divided upon separation or divorce. A post-nuptial agreement may also deal with any number of contingencies , such as how to divide marital assets that are acquired in the future and marital liabilities, like credit card debt. The basic purpose of a post-nuptial agreement is to clarify the rights of each spouse in order to avoid any further disputes at the time of a divorce. A post-nuptial agreement does not take effect until after the parties are married. The parties cannot enter into pre-nuptial agreements once a marriage has taken place. In all other respects, a post-nuptial agreement is similar to a pre-nuptial agreement. For example, a pre-nuptial agreement may include any number of provisions concerning both assets that are already owned as well as those that will be acquired in the future. When you agree to a post-nuptial agreement, you are bound by the terms of the agreement, regardless of the future circumstances.
Legal Implications In The State Of Washington
To be deemed enforceable in Washington State, a post-nuptial agreement should meet the following legal requirements:
Requirements for Validity and Enforceability.
Under RCW 26.16.120, a valid post-nuptial agreement must:
These requirements provide a general framework for validity and enforceability of any agreement between spouses concerning the disposition of their marital affairs. However, each agreement may contain a variety of other enforceability factors not outlined in this Code section, including the following:
Present Disclosure
The accords contained in RCW 26.16.120 require that a party intending to execute a nuptial agreement must provide the other party with a full and fair disclosure of his or her property and financial circumstances. Under the terms of a postnuptial agreement, full and fair disclosure means the disclosure of the same financial information, documentation, and other relevant material necessary for valuing the respective spouses’ assets and for making of a fair and equitable division of the property of the parties in the event of dissolution of marriage.
Fault of Parties
While the RCW 26.16.120 does not contain such a requirement, post-nuptial agreements may be used in Washington State when a marriage has been found to be in trouble by one or both parties, or if there are circumstances involving a third party, to bargain in advance for the settlement of any potential conflict, should that conflict result in a divorce. However, if the post-nuptial agreement is deemed by a court to have been executed as a result of invalidating factors such as fraud, duress, or unconscionability, it may be voided by the court.
Finally, the post-nuptial agreement must be written and signed by both parties. RCW 26.16.120 requires that the parties execute the agreement as per the requirements of relevant law in the presence of two witnesses, and that the signatures of the parties be acknowledged in the same manner as is required for the granting of a deed.
The Benefits To Having A Post-Nuptial Agreement
While some people consider a post-nuptial agreement to be unromantic or unnecessary, there are several potential benefits that can be derived from this type of marital contract.
Post-nuptial agreements can serve to protect the assets of either spouse. If one spouse earns significantly more money or has much larger assets than the other spouse, a post-nuptial agreement can help financially protect a spouse in the event of divorce. Alimony is also a big factor to consider. The spouse who earns more money might be obligated to pay alimony post-divorce, and a post-nuptial agreement can limit that spouse’s liability for alimony payments. Such an agreement can also ensure that any money earned prior to the marriage isn’t considered part of the marital estate.
A post-nuptial agreement can also help spouses remain on the same page financially. Creating a joint budget is a necessary yet time-consuming process. A post-nuptial agreement can help you and your spouse create a plan for how to manage your money. While an oral agreement is often enough to bind two people, having the terms of your contract as a legally binding contract often provides greater protection than a simple verbal agreement would.
In cases when couples have recently had children or have the desire to leave an inheritance to children from a previous relationship, a post-nuptial agreement can provide both parties with peace of mind. Many people want to leave their homes or savings to their children if they get divorced. In this case, a post-nuptial agreement can ensure that the house belongs to the party who originally purchased the house and cannot be transferred to the other spouse.
If you and your spouse don’t yet have children, but plan on having them in the future, a post-nuptial agreement can outline the financial obligations that each spouse has to the children, as well as any child support obligations they might have. This can help ensure a fair outcome for both parties should a divorce later occur.
Frequently Used Provisions In Post-Nuptial Agreements
Common provisions included in post-nuptial agreements usually include the following:
Financial Disclosure: Full disclosure of assets and liabilities is vital when drafting a post-nuptial agreement.
Marital Assets and Liabilities: The agreement should clearly define what property is considered marital and how it will be divided in the event of a divorce.
Separate Property: Specify the property that will remain separate and untouchable after a divorce, as well as any gifts or inheritances acquired during the marriage.
Alimony or Spousal Support: Address how alimony will be handled, including duration and amount.
Debt Responsibility: Specify which party is responsible for specific debts and address how remaining community debt will be managed.
Division of Future Acquisitions: Outline how property acquired after the date of the agreement will be divided upon divorce.
Waiver of Rights: Parties may waive their rights to certain spousal benefits, such as social security, pension plans, or inheritance.
Sunset Provision: Consider including a clause that jobs the agreement after a specified period of time—either automatically or upon request by either party.
Child Custody and Support. Any provisions concerning children must be consistent with Washington State laws and divorce is the only way that a court will determine custody support for your children.
Definitions of Separate Property: Be sure to clearly define what is considered separate property in the agreement.
Limitations And Considerations
The Possible limitations of a post-nuptial agreement needs to be understood to avoid future issues. Spouses should be aware that these agreements cannot cover child custody, child support or the parenting plan unless there is no evidence of animosity between the parents. As with any type of marriage contract, this post-nuptial agreement should be fair and reasonable at the time it is signed. If it is incredibly unfair and parties are considering divorce, then the family court will likely review the agreement. The courts will consider the financial circumstances of the parties as well as the division of property and costs associated with raising children. The courts may limit some of the remedies as well. For example , an agreement that has been deemed unconscionable under the law is void. An example of this would be if a spouse completely disinherits the other from acquiring any property, especially if other factors are present such as children or a long-term and impecunious marriage. Careful consideration should be put into the drafting and execution of the agreement. For one, both spouses need to enter into their agreement willingly and voluntarily. If they are doing so under duress, coercion or undue influence, it may be considered void or voidable. It is advisable for both spouses to have separate attorneys review the contract so legal counsel may independently advise and review with the client regarding the individual pros and cons of the agreement.
How To Draft A Post-Nuptial Agreement
Consult an Attorney. The first step in the process of crafting a post-nuptial agreement is to consult an experienced attorney, who can explain the legal requirements for a valid agreement and guide you through the process.
Gather Information. Information about your assets and debts is crucial to drafting an effective post-nuptial agreement. While you are not required to provide everything to your spouse, full transparency is the best policy. You should also be able to explain why certain assets and debts should be yours and not your spouses.
Consider Future Circumstances. The best agreements are those that work no matter what circumstances face your family in the future. If you have children, you may want to incorporate a parenting plan in the event of divorce, in the best interest of your children. You should also include a provision that will safeguard the dynamics of dividing property if certain events occur, such as the death of either spouse.
Determine What is Fair. The judge will decide whether your post-nuptial agreement is fair and reasonable, so it is important to understand the current financial realities between you and your spouse. You should both be able to negotiate among yourselves what is fair, and have realistic expectations based on your situation.
Be Open and Honest. Whenever possible, you should collaborate with your spouse during the process of drafting your post-nuptial agreement. Make a list of what each of you believe is fair, then work toward mutual agreements on essential issues. You should know exactly what you are giving up when signing an agreement, and understand how your relationship might change if you divorce. All of these factors point toward full transparency and involvement of both parties where possible.
Remain Flexible. With time, things tend to change. While it is impossible to forecast your situation several years from now, you should recognize that your post-nuptial agreement does not have to be permanent. Circumstances such as job changes, relocation, or health needs may warrant an adjustment in your agreement at a future date.
Obtain Separate Counsel. Both you and your spouse should have your own independent lawyer review your post-nuptial agreement before you sign. The attorney will charge a fee, and the agreement may need to be revised if they find anything that needs to change. Once the agreement has left your hands, you no longer have the ability to change any of the terms.
Don’t Rush. While post-nuptial agreements do not require a "cooling off" period, they require some thought and careful consideration. If you sign your post-nuptial agreement without thinking it through, you may regret later that you did not spend more time negotiating its contents.
Enforceability Problems
Although Washington State law does not prohibit post-nuptial agreements, there are several enforceability issues that are worth considering for those contemplating the use of a post-nuptial agreement. When a spouse threatens to divorce the other spouse unless a post-nuptial agreement is signed, that issue can be used as a defense to the enforceability of the agreement. The Thurston County Washington Court of Appeals ruled in Billings v. Billings, 14 Wash.App. 1 (1975) that: "[A] separation agreement entered into under threat of divorce is invalid and cannot be supported." A spouse cannot be forced to sign an agreement. However, when in marital counseling, if a spouse is threatening to obtain a divorce if the other spouse does not sign a post-nuptial agreement, it may not appear to be a threat at the time. Under Washington law, agreements that are the result of fraud or in violation of public policy are also voidable. Under Washington law, fraud is any deception designed to secure unfair or unlawful gain. To establish fraud in the context of a post-nuptial , a party must allege facts indicating that the other party misrepresented assets, interests or rights so as to prevent them from having knowledge of their true rights. Washburn v. Washburn, 25 Wash.App. 913, 914, 610 P.2d 388 (1980). Courts will rarely set aside a post-nuptial agreement merely on the basis of a person’s failure to obtain independent counsel. However, courts will weigh the availability of independent counsel in determining whether a post-nuptial agreement is valid. In such cases, the standard is whether the party lacked knowledge and the independent opportunity to speak with independent legal counsel. The court will not enforce a post-nuptial agreement that violates public policy or is in violation of the law. For example, under RCW 26.16.210 post-nuptial agreements cannot be used to deprive children, born or to be born, of property rights. However, post-nuptial agreements may provide that the property acquired during marriage shall be the separate property of either party and that the property suffered by a loss after marriage shall be the sole and separate property of the party suffering the loss.
