Many couples planning to marry prepare prenuptial agreements to protect premarital assets and/or income from a claim by the other spouse in the event of divorce, illness, disability or death. The agreement is often discussed and negotiated between the time of engagement and marriage. While it may certainly be unromantic to discuss and negotiate a prenuptial agreement during this time frame, it can save a lot of heartache and money when it comes time to distribute assets earned prior to your current marriage and can provide certainty and protection for both parties that go beyond the laws governing the division of assets.
Prenups can be peacemakers for couples who marry later in life, especially when there are children from a previous relationship. If your premarital estate is significant, especially if one spouse has an interest in a family business at the time of marriage or acquires additional interest in premarital businesses during the marriage, it may make sense to ensure that your spouse will share in your premarital assets only as much as you wish should you divorce or die. The pre-nuptial agreement can set a predetermined amount of asset distribution or maintenance.
There’s no question that prenups can be difficult emotionally. However, the pain caused by an ugly divorce where the spouses are fighting about asset values and distributions, as well as maintenance, can be much more corrosive, especially when children are involved. It may be better to endure some discomfort early on than years of fighting down the road.
But, in first marriages especially, it can set up permanent friction between soon-to-be spouses and their families. Many prenups can be unnecessarily overly broad and mean spirited. Often, the less-moneyed spouse may contract away marital financial rights. Many prenups can weaken the marriage by suggesting an imbalance in the financial security of the two partners.
Postnuptial agreements, also called postnups, are written agreements made during the marriage between spouses that primarily explain how assets and liabilities would be split upon divorce, illness, disability or death. They can address how the entire marital estate would be divided or carve out just how one asset would be treated.
Common reasons a postnup might be suggested could be to punish one partner for behavior, such as infidelity, or to show commitment to a fractured marriage by guaranteeing a richer settlement for one partner if things don’t work out. The contracts are also used when spouses want to change the financial agreements set in a prenup.
Preparing a postnup agreement may be a surprisingly cathartic experience for couples. It can be an opportunity to analyze their assets, debts and spending habits and to look at the impact of financial stress on their emotional lives. Grievances can be aired, insecurities expressed and, most important, the couple can set terms acceptable to both parties.
An additional service that is offered through Financial Solutions for Divorce is to analyze and review the financial implications and issues involved in a pre or postnuptial agreement that you might want to present to your spouse or that has been originated by your fiancé/spouse and given to you for analysis and signature. While an attorney should be the individual that writes up the pre or postnuptial agreement, it is important to have a divorce finance professional, such as Darlys, help you understand the short and long term financial implications of division of assets, future income streams and any other financial issue or question in an agreement. These agreements can actually strengthen a marriage when both spouses fully understand where they stand financially and can provide each spouse with some protection from the unknown.
Let Darlys’ expertise and experience help you understand the financial issues and implications of an agreement that impacts your financial future before you sign the agreement. Call her at 502.855.3475, email at firstname.lastname@example.org or visit www.divorcefinance.info to learn how she can help you through a financial analysis involved in your prenuptial or postnuptial agreement.