Prenuptial and postnuptial agreements are legal documents that outline what will happen to marital assets if you and your spouse get divorced or one of you passes away. Essentially, these documents serve as “insurance policies” in the event of divorce or death.
The main difference between a prenuptial and postnuptial agreement is the timing. You and your to-be spouse would both sign a prenuptial agreement before your marriage. A postnuptial agreement, on the other hand, is signed by both spouses after the wedding, while the marriage is in place. I always highly recommend that every engaged or married couple create one of these agreements, even if you never plan to get divorced.
What is a Prenuptial Agreement?
Whether you’re the one asking for a prenuptial agreement or you’re the one being asked to sign a prenuptial agreement, there is insurance for both sides. A prenuptial agreement will help you both to:
- Determine how assets are defined and how they’ll be divided in the event of divorce
- Explore how your money and assets will be protected
- Outline how your inheritance will be shared
- Understand each of your rights and obligations with regard to spousal support or alimony
- Clarify how legal fees and debts will be handled
By addressing these issues before you tie the knot, you’ll enter into your marriage with information and security. You’ll also be able to save yourself thousands of dollars down the road by avoiding divorce litigation. A prenuptial agreement affords you security now, so you don’t have to worry about your finances in the future.
What is a Postnuptial Agreement?
Couples create a postnuptial agreement after marriage. It covers many of the same things that a prenuptial agreement does, as well as any current marital concerns. Your postnuptial agreement might include:
- How your assets will be split
- How your children will be cared for in the future
- What your inheritance or pre-marital assets are, and how and if they will be divided
- Which types of debts you will split in case of divorce
- Your respective rights and obligations
Many couples I speak with are hesitant to bring up a postnuptial agreement with their spouse, fearing it will weaken their marriage or create mistrust. But having some difficult conversations with your spouse now can strengthen your marriage and help you move forward with financial and emotional security.
In fact, both prenuptial and postnuptial agreements can not only foster the growth of your marriage, but help maintain it well into the future. Even if you don’t plan to get divorced, having an agreement like this can provide a “backup plan” or “insurance policy” just in case.