DEFINITION of 'Postnuptial Agreement'

A contract created by spouses after entering into marriage that outlines the ownership of financial assets in the event of a divorce. The contract can also set out the responsibilities surrounding any children or other obligations for the duration of the marriage.

Also known as a "post-marital agreement" or "postnup".

BREAKING DOWN 'Postnuptial Agreement'

Similar to a prenuptial agreement, postnuptial agreements allow a couple to alleviate tension caused by financial concerns. Entering into this style of contract will allow spouses to establish an equitable distribution of assets if the marriage dissolves.

Marital agreements, including postnuptial ones, are often considered taboo. Critics argue such contracts indicate the couple expects the marriage to fail. However, if a contract can remedy financial discomfort, the couple could choose to enter into an agreement in hopes of keeping marital harmony.

RELATED TERMS
  1. Prenuptial Agreement

    A type of contract created by two people before entering into ...
  2. Marital Property

    A U.S. state-level legal distinction of a married individual's ...
  3. Community Property

    A U.S. state-level legal distinction of a married individual's ...
  4. Equitable Division

    A legal theory that guides how property acquired during the course ...
  5. Credit Agreement

    A legal contract in which a bank arranges to loan a customer ...
  6. Alimony

    Payments made to a spouse or former spouse under a separation ...
Related Articles
  1. Personal Finance

    Create A Pain-Free Postnuptial Agreement

    This marital contract can underline your love for each other - not undermine it.
  2. Financial Advisor

    Top Benefits of Prenup and Postnup Agreements

    It can be a sticky subject, but prenuptial or postnuptial agreements can head off a lot of potential messiness. Here's a quick guide.
  3. Managing Wealth

    5 Signs You Need A Postnup

    They're not the most fun thing to contemplate, but these contracts can actually help a marriage.
  4. Managing Wealth

    Postnup vs. Prenup: Marriage Roulette Protection

    ...and how to determine which, if either, your marriage needs.
  5. Personal Finance

    Marriage, Divorce And The Dotted Line

    Does signing a prenuptial agreement put your marriage on shaky ground, or is it just smart planning?
  6. Personal Finance

    5 Things To Consider Before Late-In-Life Marriage

    Waiting to marry has become the norm, but do you know what to consider before saying "I do"?
  7. Managing Wealth

    Before You Remarry: Blending 2 Families' Finances

    Whether both of you are bringing kids into the new marriage, or just one of you, here are some smart solutions to preempt any financial tensions.
  8. Financial Advisor

    How to Bring Up a Prenup with Clients

    Prenups aren't just for the rich. Here's how to help clients agree to one if you think they'll benefit.
  9. Financial Advisor

    Older Clients Marrying: How Advisors Can Help

    There are financial issues for clients marrying at any stage of life, but older spouses may bring many more things they need to talk through to the table.
  10. Personal Finance

    Top 6 Marriage-Killing Money Issues

    Strengthen your marriage by discussing these financial pitfalls.
RELATED FAQS
  1. What effect will a prenuptial agreement have on a 401(k)?

    Courts have ruled that a prenuptial agreement for qualified plan (including 401(k)) assets is invalid. The logic is that ... Read Answer >>
  2. How can I protect my business from my spouse during a high net worth divorce?

    Understand what constitutes a high-net-worth divorce, and learn how business owners can protect their companies when going ... Read Answer >>
  3. How can a futures trader exit a position prior to expiration?

    A futures contract is an agreement to buy or sell a commodity at a pre-determined price and quantity at a future date in ... Read Answer >>
  4. What is the difference between forward and futures contracts?

    Fundamentally, forward and futures contracts have the same function: both types of contracts allow people to buy or sell ... Read Answer >>
  5. If an individual still has his or her former spouse as the beneficiary of an IRA, ...

    It depends. Generally, divorce does not effectively change a beneficiary designation unless the divorce decree makes a stipulation ... Read Answer >>
Trading Center