A prenuptial agreement is a contract that two people enter into prior to marriage that defines their respective rights in the event that the marriage does not work out and the parties divorce. A postnuptial agreement is essentially the same contract that is entered into after marriage.
There are many different reasons why people choose to enter into either agreement. For example, you are in the process of planning your wedding and becoming one with your spouse. However before all the wedding excitement and before you were even dating, you lived life as a single, successful individual. You have your house, you are making pretty good money and with the way your career is going you will only continue to climb the ladder of success. You can say the same for your soon-to-be spouse and you both want to make sure that in the event that ever after isn’t so happy, you are both protected. So you enter into a prenuptial agreement.
Or maybe you’re married and you decide that you want to start a business. You may want to ensure that in the event that you divorce, your business is protected from any claim that your spouse may have. So you enter into a postnuptial agreement that outlines those terms.
A common misconception about a prenuptial/postnuptial agreement is that it is reserved for individuals with high assets. That is the farthest from the truth. The purpose of the agreement is to define your rights in the event of divorce. Even if you prepare the agreement to say, “you keep your money and debt if we divorce and I will keep mine,” that still protects you in the event the marriage doesn’t work out. You walk away without a headache or fight over who has to pay for what and who keeps what because you’ve already made those decisions at the outset of the marriage. And decisions made now will save money later.
It’s easier to make decisions and come to an agreement when both parties are in a good place. While I have handled divorces in which the parties get along, that is not necessarily the norm. And understandably so. It’s a good idea to come to an agreement on your rights and how you will handle your property, debts and other issues such as alimony while you and your spouse are amicable.
Keep in mind that you cannot throw the “kitchen sink” into your agr ement. Not everything that could become an issue may be settled beforeh nd. For example, you cannot predetermine the issues of custody and childlsupport. Those decisions have to be left until the divorce is underway.
Talk to an attorney regarding what you can legally agree to and ho, to best tailor your prenuptial/postnuptial to your circumstances. Plan now. !Prepare now. Save money and heartache now. Just in case.