Ohio Post-Nuptial Agreements: What Are They?
What is a Post-Nuptial Agreement?
Also known as after-nuptial agreements, post-nuptial agreements are legal contracts between married parties who choose to designate their pre- and post-marital rights with respect to property and marital obligations. Such agreements are entered into after the marriage takes place, hence the "post" in post-nuptial.
While post-nuptial agreements mirror prenup agreements in many ways, there are significant differences. Unlike prenups, which are entered into and signed before the marriage takes place, a post-nuptial agreement is created and signed sometime after the marriage occurs.
Perhaps the most significant reason why married couples in Ohio will create a post-nuptial agreement is to protect the financial interests of children from previous marriages. For example, married couples who want to ensure that their children from prior marriages will receive certain assets after their deaths, such as a family business, for instance, can utilize a post-nuptial agreement to protect those assets. A properly drafted post-nuptial agreement can provide that the business, or any business-related proceeds, are reserved solely for the benefit of children from previous marriages.
Another common reason why married parties will enter into a post-nuptial agreement is to determine what will happen to any joint property in the event of divorce or death. Recently, financial planners have encouraged couples who are co-mingling their finances to enter into a post-nuptial agreement, especially those who’ve been married for a number of years. In such cases, a post-nuptial agreement can eliminate any ambiguity over premarital assets that become jointly-held assets.
Post-nuptial agreements are also used to address debts and liabilities, since spouses are jointly liable for debts that benefit both of them. Therefore, for those who do not want to be responsible for a spouse’s debts after divorce, a post-nuptial agreement can designate responsibility for such debts .
Many married couples in Ohio may be surprised to learn that a post-nuptial agreement can also limit or even eliminate a spouse’s right to spousal support in the event of divorce. Spousal support, also known as spousal maintenance, is any money one spouse pays to the other following divorce. In Ohio, Article 3105.18 of the Ohio Revised Code allows spousal support and sets forth factors that must be considered in fashioning an award. Since the law requires judges to consider a number of factors, one or both spouses may want to avoid a lengthy court battle by entering into a post-nuptial agreement that limits or eliminates spousal support.
It is possible for a spouse to sign a statutory waiver from also known as a spousal support waiver. In the event that a spouse does not sign a waiver, they may be entitled to some alimony at divorce. It is also possible to waive spousal support for future divorces, or to create guidelines based on a sliding scale. For example, the Smith’s may decide to allocate 50% of Mr. Smith’s income during the first year after divorce, with that amount decreasing by 10% each year they remain married. They may even decide to allow for a longer support period based on income or relative earning capacity.
Another reason why spouses in Ohio will enter into a post-nuptial agreement relates to inheritance protection. For example, if a spouse has children from a previous marriage, they may wish to protect inheritance for those children, especially if they plan to remarry. This is especially important for business owners, whose children have worked in the family business, or have purchased shares of the business, and now want to protect those shares from being used to fund a new spouse’s lifestyle after divorce. Figuring out how to divide the business can be both tricky and contentious, and post-nuptial agreements are designed to eliminate ambiguity and create certainty for the parties.
The Legal Rules of Post-Nuptial Agreements in Ohio
To be valid and enforceable, a post-nuptial agreement must meet certain essential legal requirements. The Courts in Ohio look at these factors when determining whether the post-nuptial agreement offered by a party in a contested divorce proceeding is enforceable. First, Ohio law requires a post-nuptial agreement to be in writing. Alternatively, it must be in another form which the parties intended as a waiver of their marital rights. O.R.C. § 3103.06. If it is not in writing or some other form which the parties intended to be a waiver, the agreement cannot be enforced as a post-nuptial agreement. Second, the agreement must be signed voluntarily by both spouses. O.R.C. § 3103.06. The requirement that the post-nuptial agreement be voluntarily signed is two-fold: it ensures that the agreement was not the product of duress or coercion and that each spouse was of clear mind and corporeal memory when signing the document. Although the law in Ohio does not define "voluntarily," case precedent does. Ohio Courts have stated that a post-nuptial agreement is voluntarily entered if there was no fraud, misrepresentation, undue influence, coercion, or duress which prevented a party from having free agency of mind. Longbottom v. Longbottom, Cuyahoga App. No. 62496, unreported (Aug. 28, 1993) at 4. It is important to know that even if the post-nuptial agreement is entered voluntarily, it may not be enforceable depending on the terms of the agreement. Third, a post-nuptial agreement must be fair and reasonable when made. O.R.C. § 3103.06. The lack of such a provision, however, does not make the agreement per se unenforceable. Instead, such a clause in the statute is merely a remedial measure which requires that the trial court consider the fairness and reasonableness of the agreement in light of all of the circumstances. (See Gingerich, 2005-Ohio-6283 at P11 (emphasis added)). The concern with fairness and reasonableness is that the agreement not be the product of an unconscionable bargain. The question of whether the agreement is fair and reasonable is determined at the time the agreement was made. Although agreements can be unfair at the time of making, they can be later reformed on the basis of changed conditions. O.R.C. § 3103.06.
Common Clauses in Ohio Post-Nuptial Agreements
Asset Division: The most commonly agreed-upon provisions in a post-nuptial agreement are those related to asset division and the division of debts. The parties agree how property will be divided upon divorce and the division of marital debt. When a marriage ends, all of the marital assets are subject to division in a manner that is equitable, but not always equal.
Debt Responsibility: In addition to the division of assets and property acquired during marriage, post-nuptial agreements can address the division of debt. Much like asset division, marital debt is not simply divided equally. The parties can agree what debts will be paid upon divorce and who is responsible for paying them.
Spousal Support: Post-nuptial agreements can determine whether spousal support (formally referred to as alimony) will be paid upon divorce and how much shall be paid. However, the Court has vested authority to impose an award of spousal support upon divorce, so the parties must be careful not to completely release the Court’s authority over the issue. If the agreement withholds jurisdiction over spousal support, or if it limits the amount or duration of spousal support, it is important to note it could be challenged upon divorce.
Children: However, children, are not considered a "marital asset" under the law, which means that parties’ cannot address their rights and responsibilities toward children in a post-nuptial agreement. And, since the right to make decisions regarding children are a matter of public policy-families are no longer a "private family matter"-the Court will not enforce the terms of an agreement related to children.
The Pros and Cons of Post-Nuptial Agreements
As with most agreements, there are pros and cons to entering into a post-nuptial agreement. On the plus side, the agreements allow couples to decide for themselves how issues will be resolved without costly post-relationship litigation. Post-nuptial agreements have been known to save couples time, money and stress should their relationship ever end. On the negative side, it is important to know that while Ohio recognizes these agreements, they are not without scrutiny. It may be required that the other spouse be represented by independent counsel to get the benefits. Also, the agreements are regularly subjected to close examination by courts to assure that the agreements were fairly entered into and that they are in the parties’ best interests. Although Ohio does not require a certain period of separation or induced remorse before entering into a post-nuptial agreement, the effect of any delay by one spouse before signing the agreement may be closely reviewed by the court in deciding whether the agreement is valid. The question to ask yourself when deciding whether to enter into a post-nuptial agreement is: how likely is divorce to occur? Are there significant assets at stake and significant children issues? Sometimes, the more favorable the outcome of the divorce might be, the more likely divorce is. In other cases, the uncertainty of a divorce makes the spouses more inclined to enter into a post-nuptial agreement. Generally speaking, the process of negotiating the agreement forces the couple to deal with key issues and can help the couple decide if they want to stay married or not. Another reason for entering into a post-nuptial agreement can involve people coming into the marriage with significant assets. In this case, if the marriage ends with a divorce, the person has some assurance about how the marital assets will be split. A spouse’s behavior in ending the marriage can also affect the agreements. This can happen when one spouse develops a close relationship outside of the marriage, thereby threatening it. Or a spouse may make a deliberate choice to leave a job and move the family to another part of the country with no consultation with the other spouse. Under any of these scenarios, the post-nuptial agreement is an opportunity for people to address and deal with many of the issues. Nevertheless, the agreements can be problematic for several reasons. First, the agreements are usually negotiated on the eve of separation, suggesting that the intent is to negotiate for a relatively quick resolution of the property division and custody issues that will occur later. In these cases, the agreements are typically condensed versions of post-divorce accounts without negotiation and care. However, there are situations where post-nuptial agreements can be beneficial to married couples in Ohio. The key to making them acceptable is proper representation early in the process, so that the agreements are entered into voluntarily and without any undue influence.
Creating a Post-Nuptial Agreement in Ohio
Post-nuptial agreements in Ohio require a formal agreement between the parties in question. Each party has to desire to establish such an agreement, it cannot be put onto one person by another, although both parties must have armies throughout the negotiation process and legal counsel is always recommended. It must be legally binding, contain specific terms and be signed by both parties. Under Ohio law, a post-nuptial agreement may not be enforceable unless the agreement addresses the well-being of the minor child that may result from the marriage, or its dissolution. A post-nuptial agreement can be very brief or comprehensive , depending on what the parties want to accomplish. The post-nuptial agreement must be a sensible one containing items of value for each of the parties. The contract should state how items will be divided upon dissolution of the marriage or the death of either of the parties. Post-nuptial agreements must satisfy the basic contract requirements. To be enforceable, an agreement in Ohio must contain sufficient consideration. The Father of the parties being consideration. An agreement among parents may modify an order of child support. Such agreements have no practical impact upon third parties and have no public interest impact. In Ohio, a court would presume a post-nuptial agreement is valid and therefore enforceable. To effect the validity of a post-nuptial agreement in Ohio, the agreement should be the product of both parties’ voluntary, intelligent, and free will.
Contesting A Post-Nuptial Agreement In Court
Challenging a Post-Nuptial Agreement in Ohio
As with any legal contract, there are circumstances under which a post-nuptial agreement may be challenged or deemed unenforceable in Ohio courts. To be enforceable, the agreement must satisfy the legal requirements of a valid contract, among those:
• There must be two parties who are legally competent to enter into a contract
• The contract must involve a consideration, or something of value that both parties have agreed to exchange
• The agreement cannot be against public policy or illegal
In addition to possessing the basic components of a valid contract, there are several specific legal grounds on which a post-nuptial agreement may be challenged. The agreement may be claimed to be:
• Unconscionable or unfair at the time it was entered into
• The product of fraud or misrepresentation
• Made when inadequate consideration was given
• Entered into after the passage of a significant change in circumstances
To be enforceable, it is essential that a post-nuptial agreement be fair and equitable not only at the time it is entered into, but also that it be fair at the time of enforcement. Ohio courts are less likely to enforce post-nuptial agreements where the agreement has become unreasonable or substantially unfair to one party due to unforeseen or unanticipated circumstances that have arisen since the agreement was made.
If a contested post-nuptial agreement cannot be negotiated and settled out of court, the contested issues will be presented to the court in the form of motions and affidavits or through sworn testimony at a hearing. The court will review the legal grounds in question, all relevant affidavits, the circumstances under which the original agreement was made, and whether or not the agreement remains fair and reasonable at the time it is being enforced.
Ohio Post-Nuptial Agreement FAQs
Can we draft a post-nuptial agreement ourselves?
We do not recommend that you draft a post-nuptial agreement without the assistance of a lawyer. A post-nuptial agreement is a legal document, and mistakes — whether minor or major — can have significant consequences to the validity of the agreement or either spouse’s ability to enforce the terms. When you hire an attorney to work with you, you’re ensuring that the document will comply with Ohio law and that it will be enforceable in the event of a later divorce.
How much does a post-nuptial agreement cost in Ohio?
While the cost of drafting a post-nuptial agreement varies from firm to firm, it generally ranges from about $500 to $1,500. The precise fee will depend on the complexity of the agreement and the amount of time required to assist both you and your spouse. While many premarital agreements include simple provisions for separating premarital and marital property, post-nuptial agreements tend to be more complex (and thus costlier) as they often deal with the division of assets acquired after the marriage .
Will a post-nuptial agreement reduce child support or custody obligations?
No. A post-nuptial agreement cannot normally address child support and custody, since these issues are determined by state guidelines and are always open to adjustment based on a parent’s financial or living situation. Whatever agreement you come to regarding these issues may not carry weight with the courts or the child support enforcement agencies, so it’s best not to try to work together on these terms.
If I am found to have hidden assets or incurred debt that I didn’t disclose, will the post-nuptial agreement be deemed invalid?
The answer to this question varies from case to case. In general, if one party failed to disclose assets or liabilities when drafting the post-nuptial agreement and that failure resulted in an unfair outcome for that party due to the validity of the agreement, the court may well throw out the agreement entirely.