People often ask me if it is worth it to get a prenuptial agreement or a postnuptial agreement if they are already married.
In the past week, I have received messages regarding a pre-nuptial agreement that was signed out of love and the woman did not have an attorney review it prior to signing. This type of matter is unfortunate. This issue can be prevented. The choice is up to you!
My answer is that it is a great way to protect both yourself and possibly your future spouse.
A pre-nuptial agreement sets forth terms prior to the marriage taking place. This takes into account the financial arrangements and basis under which the marriage will proceed.
I believe that pre-nuptial agreements set forth the needed discussions every couple must have before they get married regarding finances and the like. This is especially beneficial in cases where the parties start out with very little and they end up building an empire together. Having the discussion as to these important financial decisions beforehand, can set out particular roles for each party while at the same time protecting the Party by setting boundaries.
If you are already married and do not have a pre-nuptial agreement in place, now may be the perfect time for a post-nuptial agreement. This is important because one of the major causes of divorce is money matters and the financial obligations of the parties. Many times as alluded to earlier, these matters are not discussed until they become a problem in the marriage.
A post-nuptial agreement is a way to set forth the clear terms of the parties when money has already become an issue in their marriage. A postnuptial agreement details what each person’s role is going to entail. The post-nuptial agreement will detail who is responsible for paying for the bills, the home the car etc., As well as the financial obligations to the children. This can include who will pay for the children’s insurance, vehicle, extracurricular activities / allowance, and more important things like post secondary education, tuition, room and board, etc.
Another important factor is that a post-nuptial agreement can delineate how the parties are going to save for retirement and in what amounts. This takes into account several factors given their income, benefits from their job (retirement, stocks, etc.), to better plan for the overall financial health of the couple in the future.
An often overlooked aspect of a post-nuptial agreement is that it can detail what will happen in the event of one of the partner’s death or in the event the parties separate or divorce.
Also, how the parties will file taxes during their marriage and in the event of a divorce can be discussed in these agreements.
With a post-nuptial agreement, it is presumed that both parties have been truthful and disclosing all of their financial information. This includes their income in earning potential, assets, future earnings or income that may come their way, etcetera. Parties also need to be upfront and honest about their debts and liabilities, before entering into a post-nuptial agreement. Failure to fully and completely disclose this information may result in the post-nuptial agreement being set aside by the Court.
Both a pre-nuptial agreement and post-nuptial agreement should disclose the exact reason for entering into the contract and any consideration given for entering into the contract beforehand. This is done to protect both parties and to give the Court and idea of why the parties chose to enter into the particular contract in the first place, or rather, the intent of the parties.
Great care and specificity must be taken in drafting such a document. For example, if one party is going to waive their right to a particular form of alimony or an asset, it should be clearly and concisely spelled out which form of alimony they are waving: rehabilitative, periodic, alimony in gross, etc. if one party is waiving a right to the other party’s retirement accounts or stocks, CD’s, etc., All details should be specifically mentioned.
As with any formal legal document, it is best if drafted by an attorney and formally executed in the presence of that attorney, a notary, and at least two independent witnesses.
