Whether you’re getting married — or you’re already married — the seemingly “unromantic” marital or nuptial agreements can actually bring a couple closer together by encouraging a dialogue about issues such as inheritance, pre-marital property, and provisions for children from a prior marriage. These agreements detail each party’s assets and can define their respective rights in the event of death or divorce.
Key reasons to create a prenuptial or postnuptial agreement include the modification of automatic property rights established by marital property laws, and addressing mandates defined by state law that otherwise apply upon death or divorce.
A prenuptial agreement is a written contract created by two individuals who intend to become married identifying the property and debt that each spouse brings into the union, and delineating each individual’s property rights. People often make prenuptial agreements to prevent or eliminate conflict. These agreements can address a wide variety of issues, including:
- Protecting the assets of one or both spouses (for instance, when one individual brings significant wealth into the marriage)
- Preventing one of the married individuals from assuming responsibility for premarital debt that has been incurred by the other spouse
- Clarifying each party’s financial rights and responsibilities during the marriage to avoid or eliminate disagreements and conflict
- Defining how assets will be divided when the husband or wife dies (for example, when either individual brings children into the marriage, the prenuptial agreement can specify how that parent’s assets will be divided between the new spouse and children from the former union)
- Establishing how marital property will be divided in the event of a divorce, and whether either spuse will receive spousal maintenance (“alimony”)
A postnuptial agreement accomplishes similar goals to those addressed by a prenuptial agreement, except the written contract is created after marriage. Postnuptial agreements help couples prevent or resolve marital issues related to finances, assets, and other issues. Postnuptial agreements can also be sought when either spouse experiences a significant change in financial status, perhaps through inheritance, change in investment performance, or substantial changes in income.