Good financial planning requires that you make smart decisions about your finances. For some couples, this means reaching a financial agreement about your assets, debts and other marital obligations. A prenuptial agreement occurs prior to a marriage. A postnuptial agreement is entered into after the marriage has taken place. In either case, both spouses determine the contents of the agreement.
Prenuptial Agreements Are Signed Before Marriage
A prenuptial agreement is a legal contract you enter into before a marriage. The purpose of a prenuptial agreement is to ensure that you and your spouse-to-be enter into the marriage with a clear understanding on the division of finances in the event of a divorce or death. The terms of a prenuptial agreement can vary, depending on your mutual wishes. It can cover how to split property purchased during the marriage. It can also cover how to split items you both owned prior to the marriage. Prenuptial agreements can also decide who will pay specific bills over the course of the marriage.
Postnuptial Agreements Are Signed After Marriage
A postnuptial agreement is a legal contract you enter into after marriage. The purpose of the agreement is to settle financial and marital issues that are present within the marriage. A postnuptial agreement can cover current and future debts. It can cover who owns which assets. It can also address mundane issues like the household budget and day-to-day concerns, such as how much time one spouse can devote to hobbies or hanging out with friends. A postnuptial agreement can exclude business debt from a future divorce. However, it cannot include a waiver of a spouse’s obligation to pay child support.
Prenuptial and Postnuptial Agreements Should Be in Writing
You and your spouse may start with an oral agreement about finances and other matters, but it’s a good idea to put the agreement in writing. This way, both parties are clear on the precise terms of the agreement. It also means each party knows what to expect of the other. A written agreement is easier to enforce than an oral one if a dispute arises in the future. A written agreement clearly shows the wishes of the couple in case one spouse dies. The agreement should be witnessed by a lawyer.
Prenuptial and Postnuptial Agreements Must Be Fair
Martial agreements that involve finances must be based on full disclosure. This means that both you and your spouse must be honest about your assets and debts. This is the only way to arrive at an agreement that is fair to both parties. Prenuptial and postnuptial agreements cannot be used to give all of the marital property to you and nothing to your spouse. Courts have the power to throw out an agreement if it a judge finds that you took advantage of the other party.
SLG can assist you with drafting, reviewing, and advising you regarding a prenuptial or postnuptial agreement to ensure that it is fair, valid, and properly protects your interests.