Postnuptial agreements are crucial in protecting valuable assets during a divorce or the death of a partner. Real estate, in particular, can take up a substantial part of the marital estate. If you and your partner manage multiple high-value properties, mortgages and rental agreements, it’s important to have clear, detailed clauses that can provide a framework for resolving these issues amicably in court.
Separate property clause
Firstly, you must define which properties are separate and not subject to division, regardless of whether they were acquired before or during the marriage. Take note that proper documentation and clear ownership records are essential to support these claims. By distinguishing separate property from marital property on your own terms, both parties can protect their real estate assets.
Income and rental proceeds clause
If you and your spouse own rental properties, it is important to have a clear plan for managing the income from these properties. You might agree to split the income equally or decide that one person will receive a larger share. It can also outline the responsibilities of property management, such as collecting rent, maintaining the property and dealing with tenants.
Disposition and sale clause
This can set the terms for what happens if you and your spouse decide to sell or transfer ownership of your properties. It can include:
- Conditions like needing both spouses’ agreement to sell or transfer property.
- How the spouse who wants to keep the property can buy out the other spouse’s share.
- The division of the proceeds from the sale if you both agree to sell a property.
This can help prevent disagreements or escalating disputes.
Mortgage and debt responsibility clause
This clause allocates responsibility for existing mortgages and property-related debts, ensuring both parties understand their financial obligations. This can include details on who will handle the refinancing and deciding on new terms. It can also include a plan for making regular payments or a strategy for paying off the mortgage early.
Don’t leave your financial future to chance
Whether you are newly married or have been together for years, a comprehensive postnuptial agreement can provide peace of mind and clarity. Make sure your agreement meets your needs and stands up in court.