Are you wondering how to protect your property in the event of a divorce or dissolution of marriage? Are you uneasy because you and your spouse did not execute a prenuptial agreement? Well, Ohio law just might be allowing you to change the terms of a marriage after it has occurred.
Senate Bill 210 was introduced by Sen. Theresa Gavarone (District 2) on July 13, 2021, and was passed with concurring amendments on December 7, 2022. Gov. DeWine signed this Bill into law on December 22, 2022, effective after 90 days. Under the new law, a married couple would be able to alter relations and contract with each other. Therefore, in this scenario, Mary and Joe could execute an agreement to keep Mary’s assets separate and set terms for the separation after the marriage. While Mary could not do this without Joe’s consent (a contract is an agreement after all), a “bargaining” of asset division could take place and be enforced at a later date.
Currently, according to Section 3103.06 of the Ohio Revised Code, “A husband and wife cannot, by any contract with each other, alter their legal relations, except that they may agree to an immediate separation and make provisions for the support of either of them and their children during the separation.” This means that a marriage, or any terms therein, cannot be “bargained away” by a contract (which is what a marital agreement is).
For instance, if Mary (net worth $20 million) married Joe (net worth $200,000) without a prenuptial agreement, Mary could not ask for one 5 years later when her lawyer tells her she should have executed one to keep her assets and investment earnings from becoming marital property (i.e. property to be divided in the event of a divorce). The only way for Mary and Joe to form an agreement would be to divorce, execute a prenuptial agreement, and then remarry each other. Obviously, this is a very costly, and rather awkward, arrangement.
While Ohio law will soon recognize these postnuptial agreements, they still have limitations and various legal elements that should be carefully navigated. Additionally, you must have prepared for this agreement within your estate documents, trust funding, and titling of assets to ensure that if assets are to remain separate, they will be kept that way according to the terms of the agreement.
If you and your spouse are interested in discussing the inclusion of these postnuptial agreements into your Estate Plan, schedule an appointment today.