Until January 2023, Ohio was only one of 2 states that did not permit parties to enter into postnuptial agreements, the other state being Iowa. While Ohio has long permitted prenuptial agreements, prior to the passage of SB 210, there was a specific statute in Ohio stating that couples, once married, could not enter agreements to alter their legal rights and responsibilities unless it was pursuant to marriage termination proceedings.
This has changed with the passage of SB 210, which will be codified primarily in ORC § 3103.05 and ORC § 3103.06(A) and go into effect March 31, 2023. Couples may now make agreements that affect their property after the date of their marriage. What does this mean and why might someone want a postnuptial agreement?
There are many reasons that a couple might choose to enter into a postnuptial agreement:
- To alter the terms of a prenuptial agreement. After marriage, the parties’ circumstances may change, and they might wish to alter the terms of their prenuptial agreement. For example, the parties might have children. Although the postnuptial agreement cannot address custody or child support arrangements, the couple might view their financial positions differently with the birth of children and decide that a new arrangement better represents their interests. Or, one of the people might have inherited significant wealth, which could change how the parties view the division of their assets upon death or divorce.
- The couple may not have had a prenuptial agreement but decide after the marriage that they wish to plan for how their estate will be divided in the event of death or divorce.
- The parties may enter into a written agreement for the division of their assets and the provisions for support intending to terminate their marriage but decide not to do so but wish to be bound by the terms of the agreement.
- The parties wish to separate physically and financially but not terminate the marriage.
- The parties have contemplated divorce but reconcile with the understanding that certain financial conditions will be addressed.
As with any contract, a postnuptial agreement must be entered into freely and without fraud, duress or coercion. Each party must make a full disclosure to the other of all assets, liabilities and income. The parties should each have legal representation in the drafting and execution of a prenuptial agreement.