New Ohio Law: Postnuptial Agreements

Most people are familiar with the concept of a prenuptial agreement, or prenup, which is an agreement between two people who are planning to marry. All states allow prenuptial agreements as long as certain conditions are met. These agreements allow couples to make a full financial disclosure to each other and agree how they will deal with certain financial issues during their marriage, in the event of one spouse’s death, or in the case of divorce. Now, in Ohio, you can create a postnuptial agreement to address similar issues after you have tied the knot.

What is a Postnuptial Agreement?

Most states have permitted couples to enter into postnuptial agreements, which are similar to prenups, except that (as the name suggests) they are entered into after marriage. A small minority of states that allow prenups have disallowed postnuptial agreements. Until recently, Ohio was in that minority. Ohio law provided that a married couple could not contractually alter their legal relations other than by an agreement to separate.

However, in December 2022, Governor DeWine signed SB 210 into law. The new law takes effect on March 23, 2023, and it permits married Ohio couples to enter into postnuptial agreements. The law also allows couples to agree to an immediate separation and provide for the division of their property and spousal and/or child support.

Benefits of a Postnuptial Agreement

What are the benefits of a postnuptial agreement? One benefit that will soon be available to Ohio residents is the ability to cancel or amend a prenuptial agreement that no longer works for their needs. For instance, one party to a prenup may have wanted to protect certain assets owned before marriage. After several years of marriage, that spouse may change their mind and want to recharacterize the assets as marital property. A postnuptial agreement allows the couple to remake their agreement to reflect their current situation.

Life doesn’t stop changing after a couple gets married. Things happen that a couple couldn’t have anticipated when they made a prenuptial agreement, and a postnuptial agreement gives them the opportunity to take unforeseen events into account. For instance, one spouse may come into a sum of money or start a business; the spouses may want to agree that those assets will be their separate property and will not be subject to division in the event of a divorce.

A postnuptial agreement can also be a way to shore up a marriage that is floundering. A spouse who has made some mistakes but doesn’t want to end the marriage might persuade the other spouse to give the marriage a second chance by entering into a postnuptial agreement. The spouse who engaged in misconduct that hurt the other spouse might show remorse by agreeing to a more favorable distribution of assets to the wronged spouse in the event a divorce later becomes necessary. However, the agreement must not encourage divorce. It is fine to offer an incentive to a spouse who might otherwise seek a divorce to give the marriage another try.

Some couples may want to create a postnuptial agreement simply because they never got around to making a prenup before their marriage. The availability of these agreements in Ohio means that couples will not need to rush to draft and execute a prenup before their marriage. A prenuptial agreement that is entered into shortly before the wedding is likely to be challenged because the party seeking to invalidate the agreement may claim it was signed under threat that the impending wedding, with invitations already issued, would be called off otherwise.

Requirements for Postnuptial Agreement in Ohio

As with a prenuptial agreement, there are certain requirements for a postnuptial agreement to be considered valid in Ohio:

  • The postnuptial agreement must be in writing and signed by both spouses;
  • The agreement must be entered into freely, without fraud, coercion, or overreaching;
  • There must be full disclosure or full knowledge, and understanding of the nature and extent of both spouses’ property; and
  • The terms of the postnuptial agreement must not promote or encourage divorce or profiteering by divorce.

If all of these requirements are met, a postnuptial agreement should be valid and enforceable. Be cautious about situations in which there could be allegations of fraud or coercion. For instance, if one spouse threatens to divorce the other unless a postnup that heavily favors the first spouse is agreed to, such an agreement might be challenged.

Spouses do not have to have separate attorneys to enter into a postnuptial agreement in Ohio. However, it is never a bad idea for spouses to be separately represented in these situations. When each spouse has his/her own family law attorney, potential conflicts of interest are avoided. Each spouse receives legal advice that is in that person’s best interests. Negotiations over terms contained in a postnup are to be expected.

What Can (and Can’t) Go Into an Ohio Postnup?

Like prenuptial agreements, postnuptial agreements deal primarily with financial issues, such as:

  • What property will be considered marital and what will be considered separate in the event of a divorce;
  • What property each spouse will inherit in the event of the other’s death (in other words, spouses may agree to be disinherited in whole or in part);
  • Providing for compensation for stay-at-home spouses who do not work outside the home but offer other types of support for the family;
  • Division of retirement or business assets;
  • Management of household expenses;
  • Spousal support issues, including whether spouses agree to waive receipt of support in the event of a divorce;
  • Which spouse will be responsible for certain debts in the event of a divorce;
  • Which spouse will have ownership of a pet in the event of a divorce.

However, there are certain issues that an Ohio postnuptial agreement cannot include such as allocation of parental rights and responsibilities (formerly known as “custody”) or child support. Those issues must be decided based upon the best interests of the children, not a prior agreement between the parents.

Do You Need a Postnuptial Agreement?

Just because postnup will soon be available in Ohio doesn’t mean that every married couple needs to rush out and get one. However, there are some couples who might benefit from entering into a postnup. Couples in which one or both spouses have children from prior relationships may benefit from using a postnuptial agreement to protect those children’s inheritances. Couples in which one spouse has an interest in a business or other asset that he/she wants to protect might also consider a postnup. And any couple that would like to be more explicit about the management of their finances, both during marriage and in case of divorce, may wish to learn more about these agreements.

As attorneys who focus exclusively on Ohio family law matters, we are keeping a very close eye on this new development in the law and what it may mean for our clients. To learn more about postnuptial agreements in Ohio, contact Melissa Graham-Hurd & Associates to schedule a consultation.