Signing a postnuptial agreement is a great way to establish the financial terms of your marriage even if you did not do so prior to being married. In it, you can stipulate asset division in the event of divorce or outline other financial details that you wish to legally establish. A postnuptial agreement is a great tool for spouses, but there are many mistakes that can render yours ineffective if you are not careful.
According to Bloomburg, postnuptial agreements are increasingly common among couples, so it is important to understand the common pitfalls that can sabotage yours. When in doubt, contact a lawyer to help you hammer out the legal details and ensure that both spouse's interests are addressed.
Language used is ambiguous
One of the most common yet easily avoidable issues with postnuptial agreements is the use of unclear and ambiguous language. The objective of any legal document is to establish specific terms, so when the terms you use are open to interpretation, the document is essentially useless. Rather than using phrases such as "long-term" or "reasonable," define exactly what you mean when you are drafting your postnup.
Indemnifications are omitted
Indemnification protects one spouse from the debt that the other has accrued or may accrue in the future. You might already have joint debt that you share, but you should not overlook past debts and the potential for any future debt. Omitting indemnifications is a serious error that can cause one spouse to become liable for the other's debts.
Tax protocol is not established
Another important yet commonly overlooked stipulation that should appear on your postnup is a protocol for filing taxes. You should establish whether you will file jointly or separately and how debts and refunds will be divided between you two. Do not underestimate the importance of outlining your tax plans when it comes time to file.