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In Wisconsin, a postnuptial agreement is a written contract created by spouses after marriage to settle financial affairs, including property division, debt allocation, and spousal support. It is a type of marital property agreement that outlines what happens in the event of divorce or death. It requires full financial disclosure, voluntary consent from both parties, and notarization to be legally enforceable.
Wisconsin marital property laws can enact sweeping changes to a couple’s property ownership after marriage. For some couples, a postnuptial marital property agreement is the right way to establish who owns what property.
A postnuptial agreement is a type of marital property agreement that is signed and made effective during the parties’ marriage. This kind of agreement is also called a postnup, but a marital property agreement signed before the marriage is called a prenuptial agreement. Wisconsin marital property statutes do not distinguish between postnups and prenups, and instead deal with them both in the category of marital property agreements.
Like other marital property agreements, the most common usage of a postnup is to reclassify some or all property as individual property. By default, property acquired during the marriage (with a few exceptions) is classified as marital property, meaning each spouse has 50% ownership. That means, under the default rules of the Wisconsin Marital Property Act, 50% of each spouse’s assets gained during the marriage is the legal property of the other spouse–this includes wages and most other forms of income. Spouses could have any number of reasons for wanting to waive this default rule, and a postnup is usually the best tool to do so if they are already married.
Postnuptial agreements often include sections on:
A common provision in a postnup is a nontestamentary disposition of property. This means giving your property away at your death without it having to go through probate. Wisconsin statutes expressly allow for couples to make this kind of nonprobate distribution in their marital property agreement, but beware–this is not a replacement for comprehensive estate planning.
Postnups can also be useful for agreeing on spousal support and property distribution in the event of a potential divorce. However, married couples looking to take advantage of this should be careful to sign as early as possible. Wisconsin courts will not let parties simply contract through the divorce process.
If the parties signed their marital property agreement well before starting the divorce process, the court will be bound by the dissolution distribution plan in that document, unless one party can show that it is unfair. However, if a marital property agreement was signed in preparation for an imminent divorce, then the court will not be bound by the agreement, and will consider it a mere suggestion when setting maintenance and property distribution.
This is one area where a prenup is almost always more effective than a postnup. It’s hard to say the agreement was signed in contemplation of imminent divorce, if it was signed before the parties even got married.
While Wisconsin laws require divorce courts to grant some deference to marital property agreements when setting maintenance, the same is not true of child support. Divorce courts have a statutory list of factors they can consider when setting child support, and marital property agreements or postnups are not on that list.
With respect to maintenance, also called spousal support or alimony, there are still some limits to what the parties can agree to in a postnup. The maintenance agreement in a postnup will not hold up if it leaves one party without “necessary and adequate support,” and if the postnup eliminates or reduces maintenance to make one party eligible for government benefits after divorce. If needed the court can order the other party to pay more anyway.
And overall, no matter what else, parties should be careful not to put anything clearly and egregiously unfair in a postnuptial agreement. For example, a postnup between two spouses with comparable assets that leaves one spouse with nothing at divorce will likely be invalidated as unfair.
Reclassification can be important for a variety of reasons. One spouse might want to secure their sole right to use and control an asset they acquired by themself during the marriage. Or, after certain individual property has been commingled, the spouses might want to separate it out again.
For example, say one spouse inherited a cabin from their family. By Wisconsin’s default marital property laws, the cabin is that spouse’s individual property, because they inherited it. But if the couple and their family go and stay in the cabin together every year, and spend marital assets on upkeep and additions, the cabin will likely be considered commingled and become marital property. To avoid this, the couple might sign a marital property agreement in which they agree that the cabin shall remain the individual property of the spouse who inherited it, regardless of what they use it for.
Another scenario where a postnup can be useful is where the spouses have separate families or blended families. For example, if one spouse has property they want to bequeath to a child from a previous marriage, the couple might use a postnup to separate out that property so the spouse can devise it in their estate plan, without worrying about how Wisconsin’s marital property laws could otherwise change the situation.
Like all marital property agreements, postnups can be invalidated if one party can prove to the court that the agreement is unfair. There are three categories of unfairness, and proving just one can invalidate the agreement. Those categories are as follows:
To guard against all these future challenges, spouses should make sure they are on the same page about their finances and their wishes, should hire separate lawyers or only work together with a lawyer they both trust, should take plenty of time to draft and review the document, and should discuss future possible changes in their situations, such as disability or unemployment.
Postnups and prenups are both types of marital property agreements in Wisconsin. For purely legal purposes they are treated very similarly, but whether you signed the agreement before or after your wedding could make a big difference if you ever find yourself in court. This is because the circumstances of signing have a big impact on enforceability. Most people intuitively think of a prenup as stronger than a postnup, but it isn’t that simple. If you’re already married, don’t think it’s too late to sign a marital property agreement. If you’re planning to get married, often a prenup looks better, but whether a postnup or a prenup is better for your situation will depend on the facts of your situation.
A marital settlement agreement is a mediated agreement negotiated and signed as the conclusion of a divorce proceeding. Completely differently, a postnup is a marital property agreement negotiated and signed while parties are not married and generally are not planning on getting divorced. They are two documents used in two very different scenarios.
