Should I File a Prenuptial/Post-nuptial Agreement

There was a time when only the wealthy entered into prenuptial/post-nuptial agreements.  Today, however, more and more couples with modest assets are using prenuptial and post-nuptial agreements as a means of managing and protecting their assets. 

What is a Prenuptial Agreement?

A prenuptial agreement, also known as a premarital agreement, is a contract between prospective spouses entered into in contemplation of marriage.  A prenuptial agreement is a legal contract which protects certain assets acquired during the marriage from being labeled as community or marital property. 

A prenuptial agreement typically sets for the assets and liabilities of each of the prospective spouses before the marriage.  These assets and liabilities are considered the separate property of each spouse.  In many states, the appreciation in value of separate property may be considered community or marital property.  However, a prenuptial agreement protects the appreciation in value from becoming community or marital property. 

In addition to protecting certain property from being labeled as marital or community property, a prenuptial agreement may also set forth: 

• How property will be distributed upon the death of either spouse;
• How property will be divided in the event of divorce;
• Limitations on spousal support and alimony;
• Which spouse has the right to manage and control certain property;
• Ownership and disposition of life insurance policies; and
• Choice of law. 

A prenuptial agreement only becomes effective upon the marriage of the couple. 

What is a Post-Nuptial Agreement?

A post-nuptial agreement is similar to a pre-nuptial agreement except that it is executed after a couple is already married.  A post-nuptial agreement may set forth a variety of matters including: 

• The exchange or partition of community or marital property between the spouses;
• Whether alimony will be paid in the event of divorce;
• How much alimony will be paid in the event of divorce;
• How property will be distributed in the event of divorce or death of one of the spouses;
• Ownership and distribution of life insurance policies; and
• Who has the right to control and manage certain property. 

A couple may choose to enter into a post-nuptial agreement to: 

• Pprotect one spouses asset’s from the collection efforts of the other spouse’s creditors;
• Provide security if the couple is having marital difficulties which they are working to resolve; and
• Protect certain assets if one of the spouses is starting a business, purchasing a business, or entering into the family business. 

Getting Legal Help

State law governs prenuptial and post-nuptial agreements.  Therefore, it’s imperative that any couple wishing to enter into a prenuptial or post-nuptial agreement consult with a qualified divorce attorney who can draw up the agreement in accordance with applicable state law.