A prenuptial agreement is a contract agreed upon before marriage that details the property each person owns, and what those property rights will be after the marriage. Prenuptial agreements are typically used in instances where one fiancé holds the majority of the assets, however this is not always the case. Prenups are growing increasingly popular, even for couples with more modest means. A prenup can be used in cases where there are children from previous marriages involved.
Essentially, the marrying couple would use the prenup to spell out what will happen to their property when they die, so that specified property can be passed on to their children without risk of the surviving spouse claiming ownership of that property. Assets as well as debts can be added to a prenuptial agreement. In the instance of one partner entering a marriage with debts, those debts can be addressed in the prenup so that if the marriage were broken, one partner would not have to accrue those debts.
Prenups may also be used to clarify financial rights and responsibilities during the marriage, as well as minimizing arguments in the case of a divorce. Marriage is considered to be a contract between two people under the law, and with this contract there are certain automatic rights for each spouse. In the absence of a prenup, a spouse usually obtains the right to:
- Shared ownership of any property acquired during the marriage
- Shared responsibility of any debts incurred by either spouse
- Shared control of any marital or community property (may include the right to sell or give away this property)
These laws, called marital property laws, are fairly standard in most states. However, not all prenups are designed the same. For a prenup to hold up in court it must be clear, understandable, and legally sound; that is why it is recommended that each party have their own lawyer review it to ensure its validity. If a prenup was not signed prior to the marriage contract, a postnuptial agreement could be used.
A postnuptial agreement is a contract created after entering into a marriage, and outlines the same guides as a prenuptial agreement. Both a prenuptial and postnuptial agreement are designed to allow you to create your own contract detailing how your property should be handled in the event of divorce or at death. Regardless of your pre-marital assets, pre and post nuptial contracts are meant to protect both parties in the event of a divorce proceedings or death.