Marital Agreement vs. Prenup

Dec 28, 2022 | Postnup, Prenuptial Agreements

Most people have heard of a prenup (I mean, who hasn’t heard Kanye’s classic Gold Digger song “we want prenup, we want prenup!”). But not many have heard of a marital agreement. A marital agreement is simply another term for a postnuptial agreement, a contract made during the marriage. In contrast, a prenup is finalized before the marriage. Let’s do a deep dive into the major differences between marital agreements and prenups.


Overview of different types of contracts between spouses

This article discusses the main difference between marital agreements (a.k.a postnuptial agreements or postnups) and prenuptial agreements (a.ka. prenups). Before we dive in, it’s good to get an understanding of when these agreements are made. 

There are generally three types of agreements that can be made between spouses: 

  • Prenuptial agreements are made before the marriage, 
  • Marital agreements (a.k.a. postnuptial agreements) are made during the marriage, and
  • Marital settlement agreements are made when the marriage ends.


Prenuptial agreements

Prenuptial agreements, or prenups, are contracts made between spouses before getting married. A prenup cannot be executed after the wedding. We repeat: a prenup cannot be “finished” after you’ve already gotten married. Hence the “pre” in “prenuptial” (nuptial = marriage). 

A prenup covers topics like property division, alimony, businesses, debt, and more, should the marriage come to an end. What a prenup can generally NOT do is handle child matters, such as custody and support (with narrow state exceptions), and it should also not include unconscionable or unlawful provisions. 

There are certain requirements that must be completed in order to create a valid prenup. For example, it must be in writing, signed by both parties, notarized, full disclosure provided, and more. Another big one is timing: yes, you need to do a prenup before the wedding, but it shouldn’t be one minute before you walk down the aisle; you should give yourself several months prior. In some states, like New Hampshire, that alone could get your prenup thrown out. Other states may just use that as one factor to support a claim that your prenup is not valid. 


Why do people get prenups? 

You know what a prenup is, but why are they used? People may choose to get a prenup for a variety of different reasons. People are getting married later and later these days, and they may have some fairly large assets they want to protect, like a house or retirement fund. But you don’t always have to have assets to require a prenup. Maybe you have an inheritance you are expecting from your grandparents or parents. You don’t have it now, but you will in the next 20 years. Prenups can protect inheritances and even gifts from family, too. 

Assets and inheritances aside, what other reasons do people get prenups? Alimony (i.e., spousal support) or some type of financial support after the marriage is one big reason. Let’s say one spouse is the breadwinner, and the other is a stay-at-home parent. The stay-at-home parent may feel uneasy not having an income, and they may even feel like they have less of a voice as the financially dependent spouse. To balance out the power dynamic, the stay-at-home parent may want some financial reassurance, such as alimony or a lump sum payment to equalize the financial discrepancy if the marriage was to end.


Postnuptial agreements (i.e., marital agreements)

Postnups, as we like to call them, can sometimes be referred to as a marital agreement because it is executed during the marriage. The biggest difference between a postnup and a prenup is the timing (was it created before or after the wedding). Prenups must be executed before the wedding. 

Postnups generally cover topics like property division, business division, spousal support, debt allocation, etc., and how it should be treated in the event of a divorce. Just like prenups, postnups should also not include any unconscionable or unlawful provisions or child custody and child support provisions (with a few states allowing narrow exceptions on child matters). 

When forming a postnup, the same general contract rules of your state will apply. Think: must be in writing, must be signed by both parties, must be notarized, full financial disclosure, etc. Again, what those exact requirements are will be dictated by your state’s law. It may vary slightly from state to state. For example, some states may require notarization, and others may not. 


Why do people get postnups instead of prenups?

Okay, so now you know the main difference between prenups and postnups is when they are executed (before vs. after the wedding). But the question still remains: why would a couple get a postnup versus a prenup? Let’s dive in.

They ran out of time to get a prenup. Like we’ve said earlier, you shouldn’t execute a prenup minutes before walking down the aisle; in fact, this could actually get your prenup thrown out in some states. Even if you go to an attorney a week before the wedding, chances are, they’ll likely turn you away and recommend a postnup (or postpone the wedding, if possible). 

Another reason a couple may have run out of time is that one party was too nervous about bringing it up to the other. This can happen with all of the pomp and circumstance of planning a wedding. Before you know it, it’s one week before the wedding day, and you’re out of time.

Mistakenly believe they can finish their prenup after the wedding. A common pitfall couples run into and end up running out of time is they mistakenly think they can finish the prenup after the wedding. They get it started weeks or even months before the wedding but get caught up in the wedding planning and forget to do the rest. They figure, “ah, it’s fine we’ll finish it while lounging by the pool on our honeymoon.” Wrong! Prenups need to be fully executed and finalized before the wedding.

To protect inheritances with a postnup. With the great wealth transfer on the horizon, the baby boomer generation is about to pass down around $68 trillion (that’s a trillion with a “T”). Parents may be poking their children and grandchildren to secure those prenups and postnups to ensure their hard-earned money stays in the family. And, yes, postnups (like prenups) can protect your inheritances. 

To protect large wedding gifts. Maybe you two didn’t have that many assets to protect prior to the wedding, so you thought, “ah, who needs a prenup? We’re broke!” Then, you received very generous and unexpected wedding gifts from both sides. Not broke anymore! You guys get to thinking and start regretting your decision not to get a prenup. Enter: the postnup. 

To simplify the divorce process. Maybe things got a little rocky during the first few years of marriage. You two had some unexpected hurdles that didn’t exist before the wedding. Now, prenups and postnups sound a lot more appetizing than they did before when you were happily engaged. Divorce has been discussed and maybe is not on the table yet, but you could both see it happening down the road. You want to be reasonable and plan for the worst to make everyone’s lives easier, so you get a postnup.

Division of businesses. If you started or inherited a family business after the marriage, perhaps you now want to protect it with a postnup. This is entirely possible and commonly done. In a postnup, you may declare ownership of your business, make sure your shares and equity don’t become a part of the marital pot, and possibly protect the earned income from the business during the marriage.


Drawbacks of postnups

Not as “sturdy” as a prenup. The biggest con of a postnup is that it is not upheld as frequently as prenups. What does that mean? Well, it means that courts across the country are more hesitant to enforce a postnup than a prenup. Postnups have not been around as long as prenups and are not as widely accepted. Heck, it wasn’t that long ago that prenups were unenforceable (rest assured, they are very much enforceable nowadays). Postnups are the relative “new kid on the block,” and it’s in your best interest to check with your state’s law on the enforceability of postnups.

Postnups cannot act retroactively. For example, let’s say you missed your window for a prenup, you’ve been married for two years, and now you want a postnup. During those two years of marriage, you probably accumulated income, property, debt, etc. That “stuff” may have already become marital/community property which is now subject to division in a divorce. You generally cannot “undo” that part. However, you can get a postnup and declare ownership of property going forward.


Prenup vs. postnup 

Whether you get a prenup or postnup is a personal question. We can’t tell you which type of contract is better for your situation; all we can tell you are the facts. 

Prenups are more widely accepted by states across the country and, thus, more likely to be upheld than a postnup. Since postnups are relatively new, courts tend to hold them under a higher level of scrutiny than prenups. 

Prenups may protect property acquired during the entire marriage, starting the moment you wed. Whereas a postnup only protects property starting from the day you execute the contract (postnups are not retroactive). If you execute a postnup two years into the marriage, those two years, you may have accumulated property that cannot be retroactively protected.

Financial goals and expectations are set before the marriage with a prenup. Prenups facilitate in-depth communication about heavy-hitting topics that you can work out before tying the knot. With a postnup, you’ve already “done the deed,” and now, if you can’t agree to terms, you may have yourself a big problem.

You are writing your life story. Get on the same page with a prenup. For love that lasts a lifetime, preparation is key. Safeguard your shared tomorrows, starting today.
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