Do the phrases “pre-nuptial agreement” and “post-nuptial agreement,” make you cringe a little bit? Make your heart feel two sizes too small? You’re not alone. Most people recoil at the prospect of turning their lovely, love-filled marriage into what sounds like a soul-sucking business deal. Unfortunately, most people are judging pre- and post-nuptial agreements without ever understanding what these contracts really are.
In fact, many relationship experts argue that signing a pre- or post-nuptial agreement signals a strong and loving partnership. “Drawing up a prenuptial agreement together is a sign of incredible trust and financial openness,” argues personal finance guru Suze Orman, in a recent Oprah magazine article touting the benefits of pre-nuptial agreements. “You’re fooling yourself if you think you can achieve complete intimacy without it.”
So what, exactly, are pre- and post-nuptial agreements? What’s the difference between the two contracts? Who needs them? And why should you care? Read on.
Pre-Nuptial Agreements
In the simplest terms, a pre-nuptial agreement (prenup) is a blueprint for how you and your soon-to-be spouse will deal with specific financial matters if your marriage ends.
“All marrying couples have a prenuptial agreement, it is known as ‘divorce law,'” explain the divorce attorneys behind the nonprofit group prenuptialagreements.org. “However, a lot of people are unhappy with the way divorce law works, and prefer to take control of their lives, rather than leave it in the hands of the government. In these cases, it makes a lot of sense to get a customized prenup.”
Legally binding, prenups stipulate how spouses will divide property and deal with assets or debts incurred during and/or prior to the marriage. Some prenups may place certain conditions on the division of assets. For instance, a spouse who commits adultery may be forced, under the terms of his or her prenup, to forfeit agreed-upon assets or provide additional spousal support.
Prenups are becoming more popular, especially with women, reports the American Academy of Matrimonial Lawyers (AAML).
“Prenuptial agreements are becoming more generally accepted as an effective way to protect assets. Interestingly, these requests are no longer just limited to a specific gender or age group,” explains Marlene Eskind Moses, president of the AAML. “In addition, as our society sees more people marry or remarry in their later years, there is an increasing emphasis on protecting pensions and retirement benefits if the marriage does not work out.”
A prenup will, ideally, protect both you and your spouse from financial ruin in the event that your union doesn’t last till death do you part.
Divorce attorneys Scott Weston and Robert Nachsin, authors of the book, I Do, You Do but Just Sign Here: A Quick and Easy Guide to Cohabitation, Prenuptial And Postnuptial Agreements, put the whole issue into much more pragmatic terms. “You wouldn’t think of entering into a business deal such as buying a car without a written document that protects and guarantees your rights right?” Weston and Nachsin point out. “Entering into a union is no different from any other kind of business arrangement.”
So who needs a prenup? According to prenuptialagreements.org, there are eight main reasons to sign a prenup:
- You are much wealthier than your partner
- You earn significantly more than your partner
- You are remarrying
- Your partner carries a high debt load
- You are a business owner
- You want to keep an estate plan or inheritance in your name or your children’s names
- You are much poorer than your partner
- You or your spouse plan to take time away from your career to raise your children
And remember, advises Orman, a prenup shouldn’t be something that you squeeze in between the caterer and the flowers when you plan your wedding day. “Ideally, you’ll want to have your prenup in place six to nine months before the wedding,” advises Orman. “A prenup signed at the last minute may be found invalid by a court.”
Post-Nuptial Agreements
The difference between pre- and post-nuptial agreements (postnups) is simply a matter of timing. Prenups are contracts signed before a marriage. Postnups are essentially the same type of legal agreement, but are signed after the parties have already married.
“[Postnups] are agreements entered into by the parties after marriage that set forth the rights and obligations of each party in the event of death or divorce, and during the marriage. Postnuptial agreements can be used when no divorce is contemplated or when divorce is not imminent. When divorce is imminent, postnuptial agreements are referred to as separation agreements,” explains attorney Elaine M. Bucher in an article for The Florida Bar Journal.
Who should consider getting a postnup? Financial experts say the following types of couples should think about drafting a postnup:
- Couples who had intended to sign a prenup but who ran out of time before their wedding day.
- Same-sex couples entering into a domestic partnership who want to be better protected from the whims of legislators.
- Couples who signed a prenup more than 10 years ago, and who want their agreement to be more up-to-date and relevant to their current financial status.
- Older couples who have accumulated more assets than they imagined they would when they first married.
Want to know more about prenups and postnups? For a much more comprehensive look at what to consider before drawing up either of these agreements, read this three-part article on “What to Include in Your Prenup,” from divorce attorney Jeffrey Lalloway’s Orange County Divorce Blog; check out this list of “30 Must-Read Articles About Pre-nuptial Agreements;” and read this CNN article about how postnups can save a marriage.
After you’ve signed your prenup or postnup, take Orman’s advice to the women she counsels: “Sign it, put it away, and go into your marriage hoping never to look at it again.”
