Prenuptial and postnuptial agreements empower couples to define their rights and obligations in case a marriage ends in divorce. These agreements are contracts that disclose the assets and debts of each spouse and dictate how those assets and debts should be distributed in the event of a divorce. The difference between a prenuptial and postnuptial agreement is that the former is written before a marriage and the latter is written during one. While prenuptial agreements were once considered unromantic or only necessary for the very rich, they are becoming increasingly common. Such agreements offer two distinct benefits for anyone planning their marriage.
First, prenuptial agreements are a form of insurance – a prudent part of marriage planning. Unforeseen events happen. It is better to be prepared for difficult times then to ignore their possibility. A pragmatic homeowner purchases insurance without the expectation of a fire actually occurring at his or her residence.
Second, crafting a prenuptial agreement requires an open and frank dialogue between future spouses. Conversing not only about finances, but also about their goals and fears for the marriage. These discussions can make a marriage stronger than it would have been otherwise. A prenuptial agreement can be a protection against potential future marital problems.
Who Needs a Prenuptial Agreement?
While there are benefits for any couple, you should strongly consider a prenuptial agreement if:
- You own, or are a partner in a business, medical practice, law firm, or professional corporation.
- You are in a career or business that is, or is likely to be, successful.
- You and your spouse are entering the marriage at different stages in life (e.g., one spouse has children the other does not, one spouse is in the workforce the other is retired).
- You have significant assets such as real estate, trust funds or investments.
- You have much more money, or much less debt, than your fiancé.
- You will be supporting your spouse while he or she attends school.
What is Required for a Prenuptial Agreement?
The technical requirements for enforceability are simple. A prenuptial agreement must be in writing and voluntarily signed by both parties. A separate attorney should represent each person. There should be a mutual disclosure of assets, as hiding assets may render the agreement invalid later.
Parties should openly discuss and negotiate the document well in advance of marriage. The earlier the agreement is signed before the marriage, the easier it will be to enforce later. Ambushing your fiancé at the last minute with an agreement prepared in private could make the agreement invalid.
What Goes in to a Prenuptial Agreement?
All marriages are contracts, but usually most of the terms are assumed or negotiable. Prenuptial agreements make some of the terms explicit and they can be as flexible or complex as the couple would like. Many agreements are exclusively financial, but others cover a wide range of issues. There could be provisions for who is allowed to make decisions regarding children from previous relationships, or who has to wash the dishes, or even how the couple’s record collection should be divided. Whatever terms and issues are important to the couple can be included in the prenuptial agreement.
Prenuptial agreements can also dictate what happens after a partner’s death. May the widower remain in the house? How much support should be ordered? Will the widower be entitled to the elective share of the decedent’s assets?
A prenuptial agreement sets out the roadmap for any marriage. Marriage planning is complex and requires significant attention to detail, but the creation of a prenuptial agreement, and dialogue about it, can be a fruitful, and even fun, exercise between you and your future spouse.
During a marriage, couples may enter into a postnuptial agreement covering the same terms described above. For example, a couple may decide to create a postnuptial agreement when one of them has received or is expecting to receive an inheritance that they want to keep separate in the event of a divorce. Whether you are getting married or are already married, consulting with an attorney experienced in this area can help you make an educated decision about whether a prenuptial or postnuptial agreement is appropriate for you.