A Prenuptial Agreement
You have probably heard of a prenuptial agreement or the more colloquial term "pre-nup." A Prenuptial agreement is a contract identifying financial rights and obligations should the marriage end at death or divorce. Such an agreement can be useful for anyone considering marriage who wants to decide in advance about the ownership and control of assets, provide for children and other family members, or have the right to continue plans for charitable giving. To accomplish this, parties voluntarily agree to terms regarding financial rights and obligations should the marriage end at death or divorce. Such an agreement can be useful for anyone considering marriage who wants to decide in advance about the ownership and control of assets, provide for children and other family members, or have the right to continue plans for charitable giving
A premarital agreement can be appropriate in several situations. It can be useful for a person contemplating a second marriage with significant assets he or she wishes to preserve, who wants to have the right to reserve assets for children from a prior marriage, or who is the owner of a business. Even younger couples entering a first marriage may consider a premarital agreement, particularly when a prospective spouse expects an inheritance or already has substantial premarital assets to which he or she wants to retain exclusive rights.
Marriage is a contract between two individuals. A marriage between individuals who already have valuable assets should have the terms if the contract is breached. This planning allows the focus to shift away from who or what caused a divorce and toward efficiently resolving a divorce by establishing: (1) who came into the marriage with what assets, (2) what a reasonable property and asset division might look like, and (3) how all parties to the marriage, including pre-existing children, are taken care of if a divorce occurs. In this sense, a prenuptial agreement is really a thoughtful expression of love between the individuals getting married.
Prenuptial agreements are not appropriate for every potential marriage. A prenuptial agreement is to avoid future hassles during a divorce. It makes no sense to draft a prenuptial agreement when both parties to a marriage have little to no property and no existing children coming into the marriage.
A domestic partnership agreement may be appropriate for a couple in, or planning for, a long-term live-in relationship but who may not marry. It can address the same property rights and obligations as a premarital agreement.
A Post Marital Agreement
A post-marital agreement, often called a post-nuptial agreement or "postnup," is a legal contract entered into by spouses after they are already married. Like a prenuptial agreement, it outlines how assets, debts, and other financial responsibilities will be divided in the event of a divorce, legal separation, or the death of a spouse.
Key Purposes
Couples often seek these agreements to clarify financial expectations and protect individual interests as their marriage evolves. Common reasons include:
- Asset Protection: Safeguarding a significant inheritance or gift received during the marriage so it remains separate property.
- Business Interests: Defining how a business started or grown during the marriage should be treated if the couple splits.
- Debt Allocation: Protecting one spouse from being held responsible for the other's significant debts (e.g., student loans or business debt).
- Providing for Children: Ensuring children from a previous marriage receive specific assets through inheritance.
- Marital Reconciliation: Using an agreement to rebuild trust and set clear boundaries following a period of relationship turbulence or infidelity.
Enforceability and Requirements
Because spouses have a heightened legal and ethical duty to one another once married, courts often scrutinize post-nups more closely than prenups. Generally, for an agreement to be valid, it must meet these criteria:
Written and Signed: The contract must be in writing and signed voluntarily by both parties.
- Full Disclosure: Both spouses must provide a full and accurate accounting of their finances, including all assets and debts.
- Fairness: The terms cannot be "unconscionable" or extremely one-sided.
- No Coercion: Neither spouse can be pressured or forced into signing the agreement.
What It Cannot Cover
While post-marital agreements cover many financial aspects, they can rarely address issues related to child custody or child support. Courts maintain the authority to determine these matters based on the "best interests of the child" at the time of a legal split.