Prenuptial and postnuptial agreements are legal contracts designed to outline the handling of marital assets in cases of divorce or death. Both agreements cover similar topics, such as the division of financial assets, alimony provisions and, in some cases, retirement benefits such as pensions. The key distinction between the two is timing: a prenuptial agreement, or “prenup,” is signed before marriage, while a postnuptial agreement, or “postnup,” is signed after. When considering a prenup vs. postnup, each type has unique pros and cons, along with some other additional differences that couples will want to take into account.
A financial advisor can help you create a financial plan for your needs before and after marriage.
Prenup vs. Postnup: The Basics
The same sorts of topics are likely to be covered in both prenups and postnups. They commonly detail how financial assets, including how retirement benefits, will be distributed. They may also prescribe levels of spousal support and alimony. Sometimes they stipulate that heirlooms and other sentimental items will remain with one family or the other in the event of a divorce or the death of one partner.
Since the discussions necessary to negotiate a prenup or postnup are likely to be challenging, it can be best to do the work of settling the main issues outside an actual attorney’s office. Mediation using someone trained to help parties come to agreement can be one way to ease decisions on the terms of a prenup or postnup.
Prenup: Pros and Cons
A prenup is more likely to be enforceable than a postnup if one of the signers attempts to dispute it following dissolution of the union. Divorce courts tend to presume that coercion is less likely when independent people are signing before they are actually married and have mixed their assets.
A potential benefit of getting a prenup is that it forces couples to discuss sensitive financial matters before tying the knot. That can limit later misunderstandings. And if one of the partners is concerned that the other is entering the union for financial gain, having a prenup can ease that fear.
Prenups can also be used to make sure that children of a previous marriage are provided for. And because it requires prior negotiation of matters that are otherwise likely to come up for the first time in a divorce, it can save money on divorce attorney fees if it comes to that.
Despite these advantages, asking a prospective partner to sign a prenup may be seen as a negative, such as a sign that they are not committed to the marriage. The intrusion of purely legal and financial matters into planning a wedding may be seen as unacceptably unromantic to some. And in many cases, raising the issue is likely to prompt some difficult discussions.
Another problem with prenups, which is one of several key issues to consider before marriage, is that they are sometimes hard to enforce. In part, this is due to frequent changes in statutes and case law regarding validity of prenups. After the trouble and expense of getting a prenup signed by both parties, in the end it may not be upheld as valid.
Postnup: Pros and Cons
A key advantage of a postnup is its flexibility for couples who didn’t establish a prenuptial agreement, but later find it beneficial. Postnups can address concerns that arise from significant changes, such as an inheritance received by one partner, or if new financial information comes to light, like discovering one partner carries substantial debt.
A postnup can also serve as a commitment tool when one spouse shows signs of dissatisfaction, helping to reinforce stability in the marriage. Conversely, if a couple is considering divorce, a postnup can help ease potential conflicts, making it easier to navigate the terms of separation if it becomes necessary.
However, postnups come with potential challenges. Courts may view them as less enforceable than prenups because married partners are often seen as having less independence and being more vulnerable to coercion.
Additionally, similar to prenups, introducing a postnup can sometimes signal concerns about the relationship’s stability. The suggestion of a postnup may be perceived as a sign of possible marital strain.
Bottom Line
Both prenups and postnups aim to settle financial and other terms of a divorce or death of a married partner in advance. The main difference is timing – prenups are done before marriage and postnups are done after. While both may be tough to enforce, postnups are sometimes seen as shakier, but may be the only way to address these matters after a couple is already married.
Financial Planning Tips
- Before signing or attempting to negotiate a prenup or postnup, consider talking it over with an experienced financial advisor. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Marriage and divorce both affect your income taxes. SmartAsset’s income tax calculator can help you understand ahead of time how your tax burden will change after you tie the knot. The effect on taxes from a divorce are also important to understand.
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