The Ohio legislature recently passed Senate Bill 210, permitting spouses to enter into a postnuptial agreement.
Newly revised Section 3103.06 of the Ohio Revised Code permits spouses to enter into an agreement or transaction with one another that “alters their legal relations.” The legislation also allows spouses to terminate or modify a prenuptial agreement.
For a postnuptial agreement to be valid, it must be:
1. In writing and signed by both spouses;
2. entered into freely without fraud, duress, coercion, or overreaching;
3. accompanied by full disclosure, or full knowledge, and understanding of the nature, value, and extent of the property of both spouses; and
4. free from terms that promote or encourage divorce or profiteering by divorce.
The law takes effect March 23, 2023. Ohio joins 48 other states that permit postnuptial agreements. (Iowa still does not allow postnuptial agreements.)
While prenuptial and postnuptial agreements are often used in divorce, these agreements can also be used for many other reasons, including:
• to agree how assets are divided at death;
• to address changed circumstances; and
• to manage business succession and to protect a spouse’s interest in a family-owned or other closely-held business.
We welcome the opportunity to discuss with you the information in this Client Alert.