Having the hard talk about prenuptial and postnuptial agreements isn’t the easiest conversation to have, but it just might be a necessary one.
Both of these agreements are designed to protect spouses in the event that their happily ever after comes to an end. Marriage is a big commitment and unfortunately the unexpected sometimes happens and both parties may decide to end their marriage. Having a prenuptial or postnuptial agreement in place helps to ensure your assets are protected.
Prenuptial vs. Postnuptial Agreements
A prenuptial agreement is drafted and signed prior to saying “I do” in an effort to clarify and specify each spouse’s separate property and liabilities, if the marriage ends.
While there is a common misconception that prenuptial agreements are only used by wealthy individuals, this could not be any further from the truth. Prenups can be beneficial to nearly everyone who is getting married. Although it is everyone’s hope that the agreement is never needed, even the exercise of having deep conversations about both parties’ finances and expectations for handling finances during the marriage is always helpful prior to marriage.
On the other hand, postnuptial agreements are entered into after the marriage has taken place and are often used in situations where a couple’s life circumstances may have changed somewhat from when they were initially married. For example, some couples choose to enter into a postnuptial agreement to protect their interest in a business, or clarify what will happen with a spouse’s anticipated inheritance, or may wish to utilize a post-nuptial agreement to facilitate their estate planning.
The concept of having a postnuptial agreement has been growing in popularity over the past few decades. It serves as a means to outline the division of money and property in the event of a divorce or the death of either spouse. Like prenuptial agreements, having one does not mean that the spouses anticipate filing for divorce, rather that they are focused on protecting their assets.
How Prenuptial & Postnuptial Agreements Help Protect Your Assets
Here is are three ways that filing a prenuptial or postnuptial agreement can help you protect your assets in the event of a divorce.
#1 Protect pre-marital property
Some newlyweds or soon-to-be spouses have children from previous marriages. When you create a prenuptial or postnuptial agreement, you are protecting not only your properties, but your children’s rightful property inheritance, too. These types of agreements help ensure that you can pass separate property to your children from any previous marriage without it getting tangled up by your new spouse or children.
#2 Protect separate assets
It is also important to protect separate assets that may be unrelated to the upcoming or current marriage. One example of this would be property that one party may have earned themselves or inherited prior to marriage. Another example would be a business owned by either spouse prior to the marriage or created by one spouse during the marriage. This is becoming more and more common to include in prenuptial and postnuptial agreements, as many people are now choosing to start their own businesses.
#3 Avoid conflict down the road
Filing for a divorce is not typically anticipated when getting married and can be an emotionally volatile situation. By having a prenuptial or postnuptial agreement, you can help minimize the headaches and arguments that usually arise in the event of a divorce.
Not Sure if You Should Have a Prenuptial or Postnuptial Agreement?
Prenuptial and postnuptial agreements may be an emotionally difficult step to take, but proactively protecting your assets now can help resolve any unforeseen conflicts down the road. These legally binding documents help clarify everything from financial obligations and property allocations.
It’s common for one partner or spouse to have more earning potential, and it’s hard to predict how either of your financial situations will change in the future. A spouse who gives up any rights in the agreement should have ample time to review the agreement with an attorney. If you need assistance with your prenuptial or postnuptial agreement, or have questions about any potential legal matter, please contact Apfelbaum Law for a consultation.
