Most people are familiar with pre-marital agreements, designed to protect individuals entering a legal marriage. LGBTQ individuals find themselves in an interesting position as it relates to pre-marital agreements because of the staggered way in which marriage equality came about. First, we had federal recognition in 2013 and then state recognition in Pennsylvania in 2014 and finally, countrywide recognition in 2015. People knew marriage equality was coming to Pennsylvania, but we did not know when and couples who legally married elsewhere suddenly found their marriages recognized in Pennsylvania overnight. As happy as we were to win the fight for marriage equality, the quickness with which it was ushered in did not necessarily allow for careful planning; hence considering a postnuptial agreement. The mention of postnuptial agreements tends to conjure up negative emotions but, in my experience, the LGBTQ community is changing the way we look at them.
Postnuptial agreements became more reliably enforced by the courts in the 1970s, when divorces became more common, and no-fault divorces where one spouse does not have to provide a reason for wanting to dissolve the marriage, rose in frequency. Prior to that, a marriage was considered a single legal unit, rather than two individuals, and could not enter into a contract with itself.
To make a postnuptial agreement valid and enforceable, it has basic requirements established by law. It needs to be written—oral agreements are not enforceable. It needs to be voluntarily agreed to by both married participants, and any indication of coercion invalidates the agreement. Full disclosure of every element within the postnuptial agreement must be made. At the time of the signing, all assets and liabilities must be fully described with clear stipulations of how those will be handled. If one spouse is unaware of the full financial picture, the agreement will be declared unenforceable. In some states, such as Pennsylvania, the “fairness” criterion is not necessary, and a one-sided agreement with large imbalance of asset distribution will be enforced. Lastly, the postnuptial agreement must be validly executed, usually by having both parties’ signatures notarized. Some states require those signatures to be witnessed as well.
Courts do not view postnuptial agreements the same in every state but in Pennsylvania, there is a trend of courts favoring and enforcing postnuptial agreements. The idea behind that is the individuals in the marriage know best how to fairly distribute assets in the event of a legal separation and a fairly negotiated and executed agreement to that effect should take precedent over default state laws that were not designed for that particular couple.
Why Have a Postnuptial Agreement?
Protections within a marriage can be just as important as those set up before a marriage takes place, and the reasons for them are not always financial. For example, if a couple finds their marriage in jeopardy due to infidelity but have come to an agreement to mend the relationship, a postnuptial agreement can be drawn up to include a stipulation that if the infidelity hasn’t ended or is ever repeated, the spouse who broke the marriage vows faces a penalty in a divorce. Moreover, financial pictures can change quickly, through incurring debt, an unexpected windfall or inheritance, or if a venture with a business partner becomes wildly successful and you want to protect the company assets from a potential divorce. Other common provisions in a postnuptial agreement deal with contributions made toward real estate, the payment and duration of spousal support, the division of liabilities and marital debts and how assets will be passed on in the event of one of the spouse’s death.
For couples who have made the decision for one of them to leave their career path to raise children, a postnuptial agreement can protect the spouse who becomes the caretaker if, after years or decades out of the workforce, they decide to divorce. The caretaker has chosen to forego the investment in building a successful career and contributing into a retirement account in pursuit of raising a family and supporting the working spouse in their career. Reentering the workforce after such a gap is a challenge, and the lost earning power can make it difficult to start over. Providing that safety net for the caretaker spouse can ease dread and uncertainty and even strengthen a marriage.
Some people say it’s not romantic to think of marriage as a legally binding contract, but it is one. People are offended by a two-year Comcast contract but enter a marriage—which is a contract—that lasts in perpetuity without anything in writing; and the breakage fee is a lot more than $350!
Everyone Has a Postnuptial Agreement
Keep in mind, everyone has a postnuptial agreement; it’s whether the couple drafted it, or the commonwealth of Pennsylvania did and as lawyers we know that the divorce code is meant for everyone and no one in particular. Particularly for LGBTQ individuals, who tend to marry later in life, the default state divorce code may not effectively provide for your relationship and crafting one of these agreements can be an empowering process that benefits your clients and provides stability around the legal and financial aspects of marriage.
Angela D. Giampolo, principal of Giampolo Law Group, maintains offices in Pennsylvania and New Jersey and specializes in LGBT law, business law, real estate law and civil rights. Her website is www.giampololaw.com and she maintains two blogs, www.phillygaylawyer.com and www.lifeinhouse.com. Contact her at email@example.com.