When it comes to protecting assets when entering into a marriage, it is not uncommon for couples to enter into “prenuptial agreements” to establish the rules that will apply in divorce when it comes to property, assets, finances, and debts. In addition to these agreements, there are also those that can be entered into after the marriage occurs…this is known as a “postnuptial agreement”. Unfortunately, to the often late realization of many, postnuptial agreements don’t provide equally valid and protective elements.
Difference between prenups and postnups
On a basic level, prenuptial agreements are proactive and are intended to protect all assets that parties had entering the marriage, whereas postnuptial agreements (entered into after marriage), become complicated to enforce due to each of the spouses having a legal fiduciary duty to care for the other in all ways. That said, postnuptial agreements, when drafted carefully and appropriately, may still be enforced by a court.
When it comes to making the decision of entering into a prenuptial or postnuptial agreement, it important to consider what property is worth protecting (and why), the potential impact either or both can have on your pending or existing marriage, and the realization that both are not interpreted equally (in many cases).
Remember that not everyone needs such agreements
For instance, first marriages with both individuals only few or no assets into the marriage are typically not good candidates. Those entering a second or third marriage, who have significant assets, or who have dependents they wish to provide for later…well, this is a different story and these agreements may be useful.
In summary, individuals wishing to plan for or protect assets prior to entering a marriage should consider the prenuptial agreement…thus, the agreement is prepared and executed before the big date arrives. Those individuals who have significant changes in circumstances after the date of marriage, may choose to protect their assets by drafting a postnuptial agreement (although whether or not it will be enforced by the court).