When two people decide to marry it is usually because they are in love and have decided life together will be sheer bliss. But sadly, the reality is that more than 40 percent of marriages end in divorce, with the percentage increasing to between 67 and 74 percent for second and subsequent marriages.
This is why an increasing number of couples are signing contracts before they marry, to ensure that they either keep the assets they had prior to the marriage or specify how assets will be divided if the marriage should end.
There are two common agreements that couples sign:
- Prenups before they get married
- Postnups after they get married
The question is, do you want one, do you need one, and if the answer to either of these questions is “yes”, which is the one for you?
Prenuptial Agreements
Prenup agreements are made before a marriage to determine how assets will be divided if they decide to divorce one day. Couples often resist this step, finding it hugely unromantic. But the point is, by making decisions prior to marriage, they can avoid a lot of heartache later on if they do decide they must split.
Prenups detail exactly who gets what if the marriage fails.
Additionally, prenups specify what happens to assets if either spouse dies, which is particularly advantageous for couples who have children from previous marriages.
Many divorce attorneys agree that prenups are better suited for those people who have a significant estate that could cause argument after their death. A prenup can specify just how much of the estate should be left to children from a previous marriage and/or your current spouse.
Prenup agreements can also be used to protect assets earned during a marriage, along with income from trusts and bequests. They can also be used to prevent paying an ex-partner alimony.
Apart from asset division and other financial considerations, couples who are about to get married often include an array of personal clauses in this agreement. This could be anything from the consequences of infidelity to a predetermined decision of who will get custody of a cat, dog, or another pet.
Issues relating to the future of the couple’s children or future children may not be included in a prenup. This is left to the courts.
Postnuptial Agreements
Postnup agreements are virtually the same as prenups, only they are made after the marriage. The main issue is that, in the absence of a prenup, many assets become “marital property” as soon as the marriage is legal. But a postnup agreement will specify how these assets will be divided in the event of a divorce.
Postnups aren’t always agreed to soon after marriage; rather couples often sign them five years or even one or two decades later. Some admit they are using the postnuptial agreement as an ultimatum to make the marriage work. Alternatively, couples decide to sign a postnup when one or other has inherited a lot of money or valuable property.
Postnup vs Prenup Decisions
Ultimately couples don’t enter a marriage expecting it to end in divorce. But with the reality of divorce statistics, it makes sense to decide on financial details while you are still friends. At very least a prenup or postnup agreement will specify what a couple wanted while they were still “in love”.
The professional team at Hastings Shadmehryknows that divorce is never easy. We assist with divorce planning as well as mediation and collaboration and will draw up both prenuptial and postnuptial agreements that we hope you we never need. Contact us to discuss what’s involved.