Prenup Agreements and Postnuptial Agreements
The Deal With Prenups
You wouldn't start a business without a business plan. Why would you delve into wedding planning without a clear financial agreement to protect the rights of each spouse? Prenuptial and postnuptial agreements may carry a stigma, but the truth is, in today's world, a proactive financial agreement can actually help partners build a strong foundation for their marriage so they won’t find themselves seeking a divorce and going through divorce proceedings down the road.
At Z Family Law, it’s our prenuptial attorneys' job to set our clients up for success—whether they’re saying “I do” or preparing for divorce proceedings. One way we accomplish this is through a prenuptial agreement or a postnuptial agreement: a written agreement designed to set forth a couple’s plans for the future and to protect the rights of each spouse in the event that they opt for the termination of their marriage.
What Is a Prenuptial Agreement?
Often referred to in popular culture as “prenups,” prenuptial agreements are written agreements between couples on the cusp of marriage. By drafting a prenup together, spouses have the opportunity to dictate the terms of such agreement in their new legal relationship, ensuring both partners are on the same page at the time of the marriage. Fundamentally, prenups are applied to protect any individual assets or marital assets held by one or both spouses in the case of divorce. This type of financial agreement can be particularly helpful if you or your future spouse have extensive individual assets, ownership in family businesses, or children of a prior marriage, but they can also be instrumental in a variety of other situations. Prenups, for instance, can outline your plan to deal with finances, debt, inheritances, financial gifts, or other related matters during your marriage.
Marriage is more than a civil union rooted in romance; it’s a legal contract that bestows responsibility on both spouses for any marital debts accrued during the partnership, also called jointly owned debt. Similarly, even after the termination of the marriage, both spouses retain ownership (to some degree) of any jointly acquired or separate property. In order to allocate both marital debt and ownership, a prenup outlines specific guidelines for the contributions spouses have made during the marriage and how future earnings and acquisitions will be distributed. For high-net-worth individuals, creating such a plan for marital assets and resource distribution can help safeguard previously-held individual assets while ensuring an equitable outcome for both spouses in the event of divorce.
However, the prenup isn’t just a useful tool employed by those preparing for the possibility of a divorce case down the line; it’s a means of establishing boundaries and expectations in the present. Additional capabilities commonly associated with prenuptial agreements are:
- Creating arrangements for minors or children from a prior marriage or former spouses
- Determining inheritance of family property
- Building a business succession plan
- Delineating the responsibilities of each party within the marriage
- Outlining trust creation and the disposition of property
Prenuptial vs. Postnuptial Agreement
While the prenup is everywhere in popular culture, there isn’t nearly as much buzz around its counterpart: the postnuptial agreement. Although this type of agreement is less well-known, it's no less important for spouses who don’t have a prenuptial agreement, but want to make a plan for their financial future in the event of a separation, or for couples who are considering or dealing with divorce proceedings. True to its name, a postnup can be crafted at any point after the wedding date and covers many of the same functions as a prenup. Unlike a prenup, postnuptial agreements are often created when there is a reasonable expectation of a forthcoming divorce process to streamline the resulting divorce proceedings, though many couples also choose to draft a postnuptial agreement if they were recently married but didn’t have the time to get a prenup before their wedding.
Why is Financial Disclosure
Important for Prenuptial Agreements?
One of the most important aspects of a prenuptial agreement is financial disclosure. This disclosure is when each spouse discloses their financial information to the other spouse. This includes information about their assets, their debts, and their income. Financial disclosure is important because it allows both spouses to know exactly what they are getting into. It also allows both partners to come up with an agreement that's fair and equitable. If you're getting married, it's important to discuss a prenup with one of our family law attorneys, as well as your future spouse. This agreement can help protect your assets and your future, especially in the event of a divorce.
Can Prenuptial Agreements Be
Changed or Terminated After Marriage?
When you and your future spouse get married after signing a prenuptial agreement, the terms of the contract are not necessarily set in stone. It is possible to make changes to the agreement, or even terminate it completely. In some cases, the prenup may have been created specifically to cover a particular situation that has since changed. For example, if one spouse inherits a large amount of money after signing the prenuptial agreement, the agreement may need to be revised to reflect the change in financial circumstances. If either spouse wishes to make changes to the prenuptial contract, they'll need to work out an agreement with the other spouse. This can be done through mediation, or by negotiating directly with each other. If an agreement is reached, both spouses will need to sign a new contract reflecting the changes.
If one spouse wishes to revoke the prenup, they'll need to provide written notice to the other spouse. This notice must state that the prenuptial agreement is being revoked, and must include the reasons for the revocation. The other spouse then has a certain amount of time to respond, either agreeing to the revocation or contesting it. If the other spouse does not respond, or if they contest the revocation, the matter will need to be resolved in court. Regardless of whether you'd like to revise or revoke your prenuptial agreements, our family law attorneys have the experience necessary to help you through the process.
Finding the Right Prenup & Postnup Attorney for You
As you navigate this challenging time, a trusted legal team of family law attorneys can help you protect your financial future and build a strong foundation for your marriage. After all, when it comes to writing your new happily ever after, the importance of finding strategic and compassionate legal counsel focused solely on family law cannot be understated. By combining our vast legal experience, our tenured team of attorneys can design a tailored strategy to help you take back your power and build the new beginning you deserve.