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Using Postnups to Renegotiate a Marriage

When a marriage hits a rocky stage, a postnuptial agreement might be just the thing to restore trust and put things back on a smoother track. Beyoncé and Jay-Z may have thought so, as they reportedly entered into a postnup after a well-publicized martial rough patch. Here’s what you need to know about postnups.

Like prenups, postnuptial (or marital) agreements may divide up, confirm, or transmute assets and obligations; they’re just signed after the couple is married instead of before. British attorney Joanne Green told the Telegraph that “postnuptial agreements are most commonly entered into when a couple has separated and recently reconciled, thereby giving both peace of mind should they split again. But it can also act as a pre-emptive measure.” Some married couples also use these agreements in connection with estate planning. See, e.g., Marriage of Holtemann (2008) 166 CA4th 1166.

Before advising clients on a postnup, here are 3 things to know:

  • The parties must fully disclose key asset information. As with agreements made in contemplation of dissolution, spouses negotiating marital agreements must adhere to the general rules governing fiduciary relationships. Fam C §§721, 1100. Although a marital agreement isn’t subject to express statutory disclosure requirements such as those applicable to couples involved in a marital dissolution, parties in a fiduciary relationship owe one another a duty of full disclosure, and particularly a duty to not misrepresent or conceal facts that materially affect the value of assets. See Marriage of Fossum (2011) 192 CA4th 336, 344.
  • The parties have a lot of flexibility, but there are some legal limits. Marital agreements enable spouses to structure their marital relationship in ways different from those otherwise provided by law. For example, they may transmute community property of the spouses to separate property of either spouse. Fam C §850(a). Likewise, an agreement may transmute a community interest in separate property to a separate interest, or one spouse’s separate property to community property or to separate property of the other spouse. Fam C §850(b)–(c). But courts won’t enforce provisions that either
    • purport to waive statutory child support obligations or to bind the court on child custody or visitation or
    • violate public policy.
  • The agreement can’t provide for a big payout on divorce. There’s a strong public policy interest in fostering and protecting marriages, so contracts that promote dissolution are prohibited. An agreement promotes dissolution if it provides for a transfer of property of substantial value only in the event of dissolution. See, e.g., Marriage of Dajani (1988) 204 CA3d 1387.

Get specific guidance on drafting postnups, including sample provisions and a complete sample form, in CEB’s California Marital Settlement and Other Family Law Agreements, chap 18.

Other CEBblog™ posts you may find useful:

© The Regents of the University of California, 2016. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited.

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  1. […] Using Postnups to Renegotiate a Marriage […]

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