The Price of a Postnuptial Agreement

What Is a Postnuptial Agreement?

A postnuptial agreement is a contract, executed after a marriage or domestic partnership has commenced, in which the parties agree to the status of certain property, debt or support in the event they divorce or separate. A postnuptial agreement can cover any topic that may be addressed in a prenuptial agreement, but the difference is that a postnuptial agreement is executed after the parties are already married or registered as domestic partners . A postnuptial agreement is often negotiated when a couple is experiencing marital discord or if extraordinary events (such as a significant increase in earnings, inheritance of assets or legal trouble) have occurred. Accordingly, a postnuptial agreement is often the precursor to a divorce action. Though not required, it is often advisable for the parties to obtain independent counsel to negotiate and draft a postnuptial agreement.

Factors That Affect the Cost

There are many factors will influence the cost of preparing a postnuptial agreement, including the complexity of the individual financial situations and the attorneys involved, how long negotiating takes, and the jurisdiction the spouses reside in.
Experience is an important factor of course. If the parties’ financial matters are simple and the attorneys have substantial experience dealing with postnuptial agreements, the cost associated with the negotiation and drafting should be lower. Conversely, if the finances are complicated, the attorney’s rates will have less of an impact on the cost if the attorney has extensive experience in drafting and negotiating complex postnuptial agreements. Geography is another major factor influencing the cost. In less populated areas, where a family law attorney may be the only game in town, there are generally not as many practitioners eligible to consult on the matter. Attorneys have differing rates and costs that fluctuate depending on the geographic area. For example, if the parties and their lawyers are located in New York City, then the fees are likely to be higher (on a whole) than other parts of the state where costs are lower. Finally, the length of the negotiations and the amount of compromise necessary to get to an acceptable draft of the agreement are the most important factors influencing cost. A postnuptial agreement requires some give and take from the parties. If the negotiations take longer than usual, the cost will likely be higher. Alternatively, if the parties agree on the fundamental issues, with small exceptions, the time the attorneys put into the agreement should be relatively short – which may translate to a lower cost.

The Average Cost: What You Should Expect

Generally, the cost of a postnuptial agreement can vary significantly from as low as $1,200 to as high as $18,000 or more. As you can imagine, there are quite a few elements that come into play in this variation in cost. The attorney’s experience with postnuptial agreements and the time that he or she has for your project are a just a couple of the elements that can have a large impact on the cost. Additionally, there may be some regional and market variability in the cost of a postnuptial agreement. A densely populated area may have a more competitive market and therefore the cost to draft a postnuptial could be lower than in an area where markets are less competitive and residents have fewer options for legal services. Also, an attorney’s reputation can sometimes drive up the cost for the first draft of the postnuptial agreement or any subsequent revisions.
Furthermore, I should really note that sometimes clients believe they are paying for an attorney’s hours and they aren’t, they are paying for his or her expertise. I have often told my clients that in most cases, it’s not about the number of hours that it takes to draft their postnuptial agreement. It’s more about my level of expertise and experience in negotiating both with the client and his or her spouse. If I’ve seen a situation before and I know exactly what can and will happen, the drafting process can proceed very quickly. Some clients hire me because they want to know what is going to happen to them throughout the negotiation process and they want to know what a judge would do, and this type of situation generally results in a shorter process and lower cost.

Is It Worth It?

Depending on the clients and our experience providing the postnuptial agreement, it may be less costly than anticipated. It is certainly less costly than litigating your disputes, should you eventually divorce without an agreement. It is feasible to know this in advance mathematically, but that’s not how we do things in family law.
Clearly, it is hard to quantify the amount of financial and emotional tension that will persist one or both of you if you do not have a postnuptial agreement, particularly if either of you enters into a second marriage. However, unlike a lawyer discussing dollars and cents in connection with divorce, a postnuptial agreement will not cost anywhere close to the cost of a divorce.
Although we are not able to predict your future, we can probably provide better information about the cost of a postnuptial agreement than we can about the cost of a divorce. Why is this? Because in a divorce, the court will have a role in dividing the parties’ assets and debts, and the parties’ rights and obligations to one another and to a child or more than one child are determined according to the law.
However, in a postnuptial agreement, more is in the power of the parties to determine the terms of their agreement than is true in a divorce. In other words , there is less discretion at play, and parameters are husband and wife. The terms of a postnuptial agreement will likely be much easier to predict than the terms of any eventual divorce. While the circumstances surrounding a divorce lead to terms that are more uncertain, the fact that a postnuptial agreement is a contract makes it more predictable.
Often though, postnuptial agreements are entered into with a view toward off-setting the possibility of a possibly disruptive divorce because there are some points of contention between the parties. This may not save you money in the short term. However, we believe that in the long run, avoiding an expensive divorce is good value for your investment in the agreement. This is because the cost of a divorce is extremely high, while the formation of a postnuptial agreement is fairly reasonable.
This being said, we do not minimize the importance of your relationship with one another. The relationship is the reason for your agreement in the first place. In the end, the best agreement is one that meets the goals of both parties, is drafted well, takes into consideration both parties’ circumstances, and provides protection to one or both parties.

Budgeting for a Postnuptial Agreement

A postnuptial agreement is a legally binding contract entered into by a couple after they have married. Couples considering a postnuptial agreement may be concerned about the costs associated with hiring an attorney. However, there are steps that can be taken to help mitigate the costs, including budgeting and negotiating for a reasonable fee.
When considering a postnuptial agreement, it’s important to keep in mind that a written agreement is not required by law. Therefore, a couple can work without feeling obligated or pressed to sign a written agreement. If money is an issue, the couple may simply decide not to enter into an agreement, although this decision should not be made lightly.
Here are some tips for budgeting and planning financially for a successful postnuptial agreement:
The most straightforward way to budget for an agreement is to use the "quick and dirty" estimate. For our clients at our Chicago, Illinois, family law firm, this method comes out to an average of $1,000 per side. Of course, only a simple agreement will be at this price point. The "quick and dirty" estimate is just that—a rough estimate that can serve as a reference and a starting point for an agreement.
However, for those who don’t want to spend $2,000 for a postnuptial agreement, it is important to keep in mind that costs can be mitigated if the couple does most of the work themselves, selecting a "basic" form with no frills. Couples will also save money if they each hire the same attorney to conduct their separate representation. This can be particularly helpful for those serving as a second spouse who want the agreement to be fair to both parties and preserve the marriage.
Another option is to attend a postnuptial workshop. While an agreement is likely to cost between $5,000 and $10,000 on average, workshops that provide legal information about postnuptial agreements, and explain the benefits of working with an attorney, are generally less costly than a one-on-one consultation.
While there is no limit to fees set by an attorney for a postnuptial agreement, as with any contract, postnuptial agreements should be reasonable for the services rendered. At our family law firm, we offer hourly rates and fixed-price fees. We also offer annual retainer fees for those clients who expect to sign multiple agreements or anticipate high levels of contact with us related to their case.

Consult an Attorney

Lawyers can explain the postnuptial agreement and its postnuptial provisions. Lawyers may be needed to draft the postnuptial agreement so that it meets the requirements of a valid postnuptial agreement. Lawyers are needed to advise clients whether the postnuptial agreement protects their respective rights and benefits or whether there are provisions in the proposed postnuptial agreement that work to disfavor one person and favor the other. Whether the parties choose to use joint lawyers or two lawyers , lawyers are needed to ensure that the postnuptial agreement is a valid postnuptial agreement that may be enforced under circumstances you and your spouse determine are important to you.