A well-drafted prenuptial and postnuptial agreement are worth their weight in gold. These documents help form the foundation of a marriage and serve as a framework for couples to have important conversations about money, business, and values. They protect assets in the event of a divorce or separation as well as make parties feel empowered. A major benefit of getting a prenuptial or postnuptial agreement is that it puts the couple in control by working through financial issues before or during the marriage.
In January, people often think about improving their lives and one way to do that is to protect your rights and assets. Now is an ideal time to make a New Year’s Resolution to create a prenup or postnup as well as update an existing postnup. If you want to take the uncertainty and guesswork out of how assets are to be divided in the event of divorce, a prenuptial agreement or postnuptial agreement may be right for you. These documents can help your divorce move along quickly, cost-effectively, and confidentially.
Prenuptial and postnuptial agreements have played an increasingly significant role in modern marriage, and they are not exclusive to those with considerable wealth or high-profile persons. Florida is a trendsetter in this area; in 1970, the Florida Supreme Court held in Posner v. Posner such agreements were enforceable as standard practice, with experts also suggesting that prenups are a smart move for anyone getting married.
Researchers found that 40% of newlyweds and engaged couples between the ages of 18 and 34 report having negotiated a prenuptial or postnuptial agreement. About half the attorneys surveyed by the American Academy of Matrimonial Lawyers have seen an increase in prenup requests by millennials. This cohort is getting married later in life and have more assets to protect coming into the marriage; they have large student loan debt; and they witnessed how financially disastrous divorce can be since nearly half of all millennials grew up in a divorced or single-parent household, higher numbers than in any previous generation.
No matter your age or the size of your bank account, these agreements should be as pervasive as insurance. Prenups, postnups, and insurance are all financial safety nets. While you buy car insurance in case of an accident and homeowner’s insurance if your house succumbs to a flood or fire, you hope you never need it. The same is true of prenups and postnups.
Differences Between a Prenup & Postnup
A prenuptial agreement is a written contract where an engaged couple states their rights and responsibilities regarding premarital and marital assets and debts, and what would happen should their marriage end in divorce. Everyone has something worth protecting. Prenups give guidance as to what happens to property, debt, and earnings.
A prenup cannot address the allocation of parental responsibilities, parenting time or amount of child support that will be paid as those decisions must be based on the best interest of the child.
Parties will have their separate attorneys review and negotiate the terms of the prenup and make suggestions for possible changes. Once a draft has been approved by everyone, they and their respective attorneys would execute the agreement. Generally speaking, it must be shown that the parties had the legal capacity to enter into a contract and that it was not entered into by fraud, duress or undue influence. Parties must also engage in full transparency and disclosure.
Postnups are enforceable, negotiated agreements made after the parties have tied the knot. It’s a prenup for already-married people; it can do everything a prenup can, but it can be signed at any time during a marriage. Whether or not a couple has signed a prenuptial agreement, they may find later in their marriage that a postnup is called for.
Postnups have become increasingly popular, especially when one spouse has an inheritance forthcoming or there’s a large liquidity event, such as the sale of a company that the couple wants to address what happens with the proceeds. A postnup is an effective way to document intentions for earnings and assets during the marriage as well as gives instructions on handling financial issues in the case of divorce.
Is a Prenup or Postnup Right for You?
Never underestimate the value of prenuptial and postnuptial agreements: They are necessary and signal confidence in the marriage by protecting each spouse with complete transparency. Both agreements can protect a business one spouse owns, insulate the other spouse from lawsuits related to that business, ensure there’s consensus on each party’s financial rights, and protect spouses from each other’s debts.
These legally binding agreements can thwart a costly and contentious divorce if the marriage doesn’t work out. Each spouse should have independent legal representation when creating or reviewing these agreements. It is also strongly recommended that the spouses engage in full financial disclosure, to help ensure both parties are fully aware of the other’s financial status prior to executing the agreement.
Discussing a prenup and postnup forces couples to communicate about financial goals, attitudes about money, spending and saving habits, and debts. Since money issues are the leading causes of divorce, having these conversations can help build the foundation for a stronger and long-lasting union.
As an experienced family law attorney who drafts, negotiates, reviews, and revises prenup and postnup agreements, I have seen firsthand how they help protect couples from making decisions in the future from a place of anger and resentment. Prenups and postnups provide peace of mind when couples are clear-headed about their desires and goals. Prenups and postnups will also save the spouses significant financial and emotional stress in the event of divorce.
Is a prenuptial or postnuptial agreement right for your relationship? Make a New Year’s Resolution to put all your legal documents in order, including your prenup and postnup agreement. Call 954-300-1602 or fill out this form today as I look forward to hearing from you and discussing your unique situation.
