What Are Pre- And Post-Nuptial Agreements?
Most people recoil at the prospect of turning their lovely, love-filled marriage into what sounds like a soul-sucking business deal. Unfortunately, most people are judging pre- and post-nuptial agreements without ever understanding what these contracts really are.
In fact, many relationship experts argue that signing a pre- or post-nuptial agreement signals a strong, trusting and loving partnership.
So what, exactly, are pre- and post-nuptial agreements? What’s the difference between the two contracts? Who needs them?
In the simplest terms, a pre-nuptial agreement (prenup) is a blueprint for how you and your soon-to-be spouse will deal with specific financial matters if your marriage ends.
All marrying couples have a prenuptial agreement, whether they are aware of it or not; it is known as “divorce law.” However, a lot of people are unhappy with the way divorce law works, and prefer to take control of their lives, rather than leave it in the hands of the government. In these cases, it makes a lot of sense to get a customized prenup.”
Legally binding, prenups stipulate how spouses will divide property and deal with assets or debts incurred during and/or prior to the marriage. Some prenups may place certain conditions on the division of assets. For instance, a spouse who commits adultery may be forced, under the terms of his or her prenup, to forfeit agreed-upon assets or provide additional spousal support.
Prenuptial agreements are becoming more generally accepted as an effective way to protect assets. Interestingly, these requests are no longer just limited to a specific gender or age group; as our society sees more people marry or remarry in their later years, there is an increasing emphasis on protecting pensions and retirement benefits if the marriage does not work out.
A prenup will, ideally, protect both you and your spouse from financial ruin in the event that your union doesn’t last till death do you part.
So who needs a prenup? Below are factors worth considering:
- There is a large wealth or income gap between you.
- One of you carries a high debt load
- You are a business owner
- You want to keep an estate plan or inheritance in your name or your children’s names
- You or your spouse plan to take time away from your career to raise your children
And remember, a prenup shouldn’t be something that you squeeze in between the caterer and the flowers when you plan your wedding day. Ideally, you'll want to have your prenup in place six to nine months before the wedding. A prenup signed at the last minute may be found invalid by a court.
The difference between pre- and post-nuptial agreements (postnups) is simply a matter of timing. Prenups are contracts signed before a marriage. Postnups are essentially the same type of legal agreement, but are signed after the parties have already married.
Postnups are agreements entered into by the parties after marriage that set forth the rights and obligations of each party in the event of death or divorce, and during the marriage. Postnuptial agreements can be used when no divorce is contemplated, when divorce is imminent, postnuptial agreements are referred to as separation agreements.
Who should consider getting a postnup?
- Couples who had intended to sign a prenup but who ran out of time before their wedding day.
- Same-sex couples entering into a domestic partnership who want to be better protected from the whims of legislators.
- Couples who signed a prenup more than 10 years ago, and who want their agreement to be more up-to-date and relevant to their current financial status.
- Older couples who have accumulated more assets than they imagined they would when they first married.
My advice to couples who are conflicted about a pre-nup or post-nup agreemant?
“Sign it, put it away, and go into your marriage hoping never to look at it again.”