Prenuptial and postnuptial agreements are legal contracts that specify how marital assets will be managed if the marriage ends in divorce. Both address the division of financial assets, provisions for alimony and retirement benefits. The primary distinction between them is when they are drawn up. Prenuptial agreements are executed before marriage, whereas postnuptial agreements are executed afterward.
Both prenups and postnups can ease financial concerns in a marriage or postmarriage relationship. However, they have distinct differences, which you should understand before signing either contract.
Prenuptial Agreements
Prenuptial agreements are essential for couples who possess substantial assets as they embark on their marital journey. Prenups can establish terms for alimony and safeguard assets such as family businesses or inheritances, ensuring clear expectations and protecting the interests of both spouses.
A prenuptial agreement may be beneficial for couples who plan to marry and wish to:
- protect significant premarital assets or family inheritances
- clarify financial expectations and responsibilities
- keep debts separate
- safeguard existing business interests.
Postnuptial Agreements
Postnuptial agreements share many similarities with prenuptial agreements. The primary distinction between the two contracts is that postnuptial agreements are established after the marriage takes place. Postnuptial agreements can also help manage financial changes that may occur during the marriage, such as promotions or inheritances.
A postnuptial agreement might be beneficial if you wish to:
- protect your financial interests after you have married
- address significant new assets or inheritance rights
- address financial mismanagement issues
- revoke or amend previous prenuptial agreements
To avoid problems, it’s best to seek assistance if you and your partner decide to sign either a prenup or a postnup.
