Exploring the idea of prenuptial and postnuptial agreements doesn’t make you a bad fiancée or spouse. In fact, it makes you a responsible one!
Prenuptial Agreements vs Postnuptial Agreements
In a nutshell, the key difference between a prenuptial and a postnuptial agreement, is whether the contract was created before, or during marriage. A prenuptial agreement is a legally binding contract created before marriage by two partners.
On the other hand, postnuptial agreements are contracts that have been drawn up when couples feel they need more clarity on financial matters during the marriage. It is not uncommon for postnuptial agreement discussions to be sparked by a separation followed with reconciliation, but there are various reasons for acquiring a postnup.
Prenups and postnups are essentially detailed records of how assets and property should be divided in the event of divorce. Not only do the contracts concern property and assets but also income, debt, individual inheritances, joint purchases and more.
In a world of unknowns, one thing is for sure – prenups and postnups can only protect and benefit you in the long run. Although it may feel awkward to bring up this idea with your spouse or fiancée, you may thank yourself later.
Even in divorces that are simple, things can get messy when it comes to the division of assets. And really, who needs to get tied down arguing about individual material possessions when they are trying to move on with their lives?
Reasons to Consider a Prenuptial or Postnuptial Agreement
While prenups and postnups are stigmatized, there is nothing wrong with taking precautions that will protect you (and your kids) emotionally and financially. Unfortunately, there are several hypothetical scenarios that could take you and your partner in different directions!
Although you may be together forever, money doesn’t grow on trees – and asking for a prenup is simply a way of protecting your assets in the event of a split.
Wealthier individuals who are marrying need to beware of how to protect their assets, and a prenuptial agreement is one very good way to do so. This is because these types of contracts allow you to keep your money and assets separate from the marital estate as desired.
What can be included in a prenuptial or postnuptial agreement:
How the couples will split marital assets or marital debts.
The details of alimony or the waiver of alimony, or any modification within.
If one or both of you hold interest in a business, the prenup or postnup can address how interest and the appreciation of the interest during the marriage will be handled in the event of divorce.
A prenup or postnup can address any additional terms that a couple wants to focus on that are reasonable, clear, and not in opposition to any public policy. With the exception of any child related support or custody. That’s a no-no!
If you missed the chance to get a prenup and are already married, you may consider a postnup.
Now, postnups are a different animal than prenups, in that they are not as widely accepted. Some states will not enforce them. Some states enforce them as commonly as prenups. If you are able to obtain a postnup in your state, they allow you to separate your finances. This may include your business and any increase in value that may arise from other assets, among many others.
Is one option better than the other?
While it’s tough for us to say exactly what will work best for your particular marriage, it is generally safe to say that a prenup can hold many advantages over a postnup, if you have the option. Why? The main concern is that postnups are not upheld by many states, while prenups are much more widely accepted, as they have been around longer. Frankly, the lack of use and enforcement of postnups is still largely due to the fact that postnups have not been around as long as prenups. In the grand scheme of marital contracts, they are relatively new- and much newer than prenups! After all, it was not very long ago that prenups were not recognized in most states. While we can hope that postnups will soon catch on in popularity as prenups have, for now it is critical for those obtaining postnups to do their research, and ensure that the state they’re in will legally acknowledge a postnup. Nobody wants to pay significant negotiation and legal fees only to discover their contract is not enforceable.
So, while prenups are more likely to be upheld by a court of law, what other benefits do they hold in comparison to postnups? Generally speaking, because a prenup is executed prior to a marriage, it is a proactive approach that grants you the opportunity to set your marriage up for financial success and clarity- and get off on the right foot. When drafting a prenup, you and your future spouse get to mitigate future potential financial risks and mishaps but agreeing to terms surrounding your assets, income, and debt. Whether you’re protecting your spouse from having to acquire your student loan debt, safeguarding your own retirement accounts, or agreeing to alimony payments on your terms (as opposed to the terms decided by state law or a divorce court), a prenup can act as life insurance for your marriage – while neither of you hope for your marriage to end in divorce, you can each sleep at night knowing that you have the best chance of being protected in case it does.
Yes, proactivity will always hold benefits. However, if you missed the boat on getting a prenup for whatever reason (we don’t judge), there’s also truth to the adage “better late than never!” That’s where a postnup might hold its own. Postnups can be ideal for married couples who weren’t aware of or decided against a prenup while they were engaged. Remember though, a prenup or postnup doesn’t spell out imminent divorce. Quite the contrary, a postnup will almost definitely be invalidated by a judge during divorce court if it was thought to be “divorce planning.” Hypothetically, if a postnup was finalized not long before a married couple filed for divorce, the judge would most likely invalidate it as divorce planning. The same goes for a separated couple who would attempt to get a postnup. Because they are already separated and considered one step closer to potential divorce, their postnup would almost assuredly be scrapped in a court of law. Courts usually consider this type of thing to be “divorce planning” and do not look upon it favorably.
Sure, hindsight is 20/20, but with that in mind, it’s also worth noting that postnups cannot act retrospectively. Without a prenup in place, so many assets that were once individual may become marital property upon marriage. While a prenup may work to prevent certain assets from becoming marital by identifying them as “separate property,” from ever becoming the case, a postnup cannot “undo” marital assets. Rather, a postnup can separate out assets or specify others as marital.
So…what can a postnup do?
Remember – a prenup can do all of these things and much more.
Anything a postnup can do, a prenup can do better! Sort of. If you have yet to say “I do” and you have a least a few months before exchanging nuptials (remember, the sooner that your prenup is finalized before your wedding day, the fewer issues you will have) it’s not too late to get a prenup.
If you and your fiance decide to spring for a prenup, you don’t have to rely on the traditional costly methods and legal negotiations to obtain one. Legally sound prenups that are tailored to the laws of your state are what we specialize in, and the entire process is done completely online – ideal for the potential quarantines still to come. Our platform, HelloPrenup, features processes like Issue Identification and Discussion & Issue Resolution, ensuring the contract drafting is a collaborative process that minimizes discomfort. After all, collaboration is a vital component to a happy marriage, and by creating a prenuptial agreement together by discussing the terms as a couple – rather than feeling as if you’re going head-to-head in a legal battle with your future spouse -HelloPrenup allows you and your fiancé to work on your prenup as a team.