A prenuptial agreement (aka pre-nup) is a contract that allows a couple to decide what will become property of the marriage and what will remain each person’s separate property. It typically lists the property owned by each person as well as their debts, and specifies what each person’s property rights will be after marriage, regardless of how the marriage ended (divorce, death, incapacitation).
Prenuptial agreements are becoming more and more popular today. In fact, within the last 20 years the number of prenuptial agreements has increased by 500%. Many have to overcome the belief that premarital agreements are only for wealthy individuals. The truth is anyone who wants to get married could benefit greatly from having a well-drafted prenuptial agreement, as money problems are a primary reason for divorce, as well as postmarital issues.
Reasons to Consider a Prenuptial Agreement:
- If one spouse brings significantly greater financial assets and property into the marriage than the other;
- If one spouse gives up a well-paying job or career in order to stay at home with children or to follow the other spouse to a new geographic location;
- If one spouse is part of a family business;
- If one spouse or both spouses have children from prior marriages; or
- If the spouses have different investment and retirement goals due to age disparity or philosophical reasons.
A postnuptial agreement is an agreement made between spouses after they are married. Like prenuptial agreements, postnuptial agreements also discuss the division of property in the event of divorce. Postnuptial agreements are usually useful when one spouse’s financial circumstances changes significantly. For instance, if a spouse stands to inherit a large amount of property and assets from his or her parents, a postnuptial agreement can clearly define her property as separate and make provisions for its disposal, if any, when the marriage ends.
Making an enforceable prenuptial or postnuptial agreement requires complete and truthful disclosure of all assets and liabilities by both spouses.
To learn more about prenuptial and postnuptial agreements, feel free to contact our office today.