Prenuptial & postnuptial agreements are legal documents that two people sign either before marriage or during the marriage to protect themselves in the event of divorce. The documents address specific issues such as protecting pre-existing non-marital assets and inheritance, determining retirement benefits, spousal support, and the division of assets and liabilities that exist at the time or are acquired in the future. The purpose of such an agreement is to set the ground rules in an amicable environment to avoid conflict and legal fees in the future.
The primary distinction between a prenuptial and postnuptial agreement - as indicated by its name - is when the agreement is signed. A "Pre" nuptial agreement is signed before the marriage; and a "Post" nuptial agreement is signed after the marriage. While the agreements can address all of the same topics, they have legal distinctions that an individual needs to be made aware.
A prenuptial agreement (prenup) is a written contract between both soon-to-be spouses before they enter into marriage. The prenup typically identifies the property, assets, and/or debts each person owns before the marriage and indicates who will retain ownership of the property and any increase or decrease in value during the marriage when or if the marriage is dissolved.
A prenuptial agreement is beneficial for the following reasons:
While you certainly aren't entering into a marriage with plans for it to end in divorce, it's important to be able to talk to your significant other about these sensitive topics. Having that conversation now — in an open, transparent, and amicable manner guided by lawyers you both trust — can put your minds at ease as you enter into your marriage.
When you marry another person, your original intent may be to share everything ... all assets and all debts. However, during the marriage, circumstances may change. Perhaps you inherit assets from a family member you want to protect for your children or you receive a large settlement you will need to support you later in life. A postnuptial agreement allows you to create a legally binding contract to identify how the assets and liabilities you currently have are to be allocated, how the assets and liabilities you may acquire will be allocated, whether one spouse will receive support, and, if so, how that is calculated and for what duration.
There are several benefits to a postnuptial agreement, including:
Whether you choose a prenuptial agreement, a postnuptial agreement, or no agreement, it is important to have an open conversation with your spouse or soon to be spouse about all financial matters. A family lawyer can help protect you under stand the multitude of issues involved, outline the pros and cons, and help you weigh the risks in deciding whether an agreement is right for you. And, if you decide to enter into an agreement, a family lawyer can insure your interests and your needs are protected.
Despite the benefits of prenuptial and postnuptial agreements, there are common misconceptions that may deter a couple from entering into an agreement. Don't let these misconceptions hinder you from exploring your legal options.
Few couples ever enter into a marriage thinking that they will divorce. Fewer couples plan for a divorce. However, divorce is a reality in our world. As such, a marital agreement is a smart way to protect yourself if a divorce ever occurs.
The purpose of a prenuptial or postnuptial agreement is not to protect the rich. Instead, an agreement helps a couple divide their financial assets, liabilities, and provide a framework to protect themselves from expensive legal fees and costs in the future.
A marriage agreement is designed to benefit both spouses — not just the wealthier spouse. The goal is for each person to come up with an equitable agreement that protect both parties and provide clarity and security during the marriage.
A prenuptial or postnuptial agreement can help you and your spouse draw clear financial boundaries, give you an opportunity to talk openly and honestly about your situation, and protect each of you if something happens down the road. Your family lawyer can help you work out the details.