When a couple decides to get married, they understand they are entering into an arrangement that will result in the sharing of their assets and debts. Yet, what happens when there are large amounts of assets or debts involved? The couples may decide to enter into a prenuptial or postnuptial agreement.
What Are Prenuptial and Postnuptial Agreements?
A prenuptial agreement is known by many names, including a premarital agreement, a marriage contract or simply a prenup. The purpose of a prenup is to settle finances and the division of assets and property prior to the marriage.
In contrast, a postnuptial agreement is a marriage contract entered into after the marriage takes place. A postnup does the exact same thing as a prenup—it’s just the timing that’s different.
The Reasons for Signing a Prenuptial or Postnuptial Agreement
There are many reasons why couples choose to enter into a prenuptial or postnuptial agreement. Most of the time, prenuptial agreements are used to protect a spouse with more tangible assets acquired before the marriage. They also protect a spouse from suffering the consequences of large amounts of debt accrued by the other.
Sometimes, things can happen after the wedding that you didn’t foresee. Postnuptial agreements are often entered into after a spouse acquires a large asset such as property or finances after the marriage takes place. Or, if a couple starts a business together, a postnuptial agreement is often considered to protect assets and assign critical business roles. Other reasons for a postnuptial may include:
- Protecting assets set aside for children from previous relationships
- Protecting a spouse from the bad financial decisions made by the other party while married
- Desiring to wait until after the marriage to enter into an agreement
Regardless of whichever agreement you choose, both take the power of property division away from the court should a divorce occur.
Is a Postnuptial or Prenuptial Agreement Right for You?
If you’re considering entering into a marital agreement, we recommend reaching out to an experienced family law attorney who can help you choose whether or not an agreement is right for you. To learn more about prenuptial and postnuptial agreements or for answers to your questions, send us a message.