PRENUPTIAL AND POSTNUPTIAL AGREEMENTS
What is the difference between Prenups and Postnuptial Agreements?
A prenuptial agreement is a written contract entered into by a couple prior to marriage or a civil union that enables them to select and control many of the legal rights they acquire upon marrying, and what rights they have when their marriage eventually ends. Prenuptial agreements are interchangeably referred to as premarital agreements or antenuptial agreements because they are written contracts that couples make before getting married.
Like a prenup, a post-nuptial agreement sets forth the rights and obligations of each spouse during the marriage, and what happens when the marriage ends by the death of a spouse or divorce. The most obvious difference between a premarital agreement and a postnuptial agreement is that a couple enters into a post-nup after they are already married.
The terms of prenups and postnups (or just, “marital agreements”) are very personal to a couple, and no two marital agreements are alike because every person is unique. However, prenuptial agreements and postnuptial agreements generally cover the same topics and concepts, and so there is a tremendous amount of overlap between the terms addressed in marital agreements signed before or after marriage. From a big-picture perspective, the content and terms of marital agreements are generally driven by a couple’s desire to “opt out” of certain default state laws that would otherwise determine their marital rights, but which laws might not be bad for them and/or might lead to fighting in the event of a divorce. Both premarital and postnuptial agreements are generally written to allow a couple to agree on terms that supersede and replace those default state marriage and divorce laws that often force couples to lawyer up and battle it out in court, such as:
The ability to keep separate property separate (free from marital claims) during the marriage;
Whether a spouse can seek spousal support (e.g., alimony) in a divorce;
How to fairly divide joint marital property in the event of divorce;
Whether a surviving spouse can claim an elective share or “take against” the estate of the deceased spouse; and
Whether a spouse can make a marital claim against the retirement savings and benefits of the other spouse upon divorce.
A well-drafted martial agreement can eliminate conflict in a divorce because most of the issues that cause spouses to fight are already decided. If prepared correctly, a premarital or post-nuptial agreement should increase the chance that a divorcing couple can avoid a trial and keep things friendly.
In Virginia, both prenuptial and postnuptial agreements are expressly allowed by the Premarital Agreement Act (Va. Code §§ 20-147 through 20-155), which sets forth the requirements for entering into a legally enforceable marital agreement. The Virginia Premarital Agreement Act clearly sets forth what content and terms can be included in a marital agreement signed before or after marriage. The fact that the Commonwealth of Virginia has embraced marital agreements by codifying the contractual requirements in the Premarital Agreement Act makes Virginia a favorable jurisdiction to have a prenup or a postnuptial agreement.
Couples should sign a premarital agreement several weeks or months before their marriage to avoid a potential challenge to the enforceability of the contract on the grounds that it was signed under duress (time-pressure). A prenup only becomes effective when a couple actually gets married, as opposed to when they sign the agreement. See Va. Code § 20-149. Executing a prenup a few weeks before the wedding is particularly important when only one party has legal representation for the agreement, because signing early makes it harder for the non-represented party to argue that he/she was deprived of the opportunity to have the document reviewed by an independent attorney. In contrast, a postnuptial agreement becomes effective immediately when signed, under § 20-155 of the Virginia Premarital Agreement Act.
Why do couples sign Postnuptial Agreements?
Post-nuptial Agreements are not nearly as popular as prenups, but a post-marital agreement may be the only choice for couples who wait until the last minute to consider a premarital agreement. Sometimes people get so wrapped up in planning their wedding that they don’t even think about getting a prenuptial agreement until it is too late. Other married couples have a specific reason or event that precipitates their desire to put a postnuptial agreement into place. For example, a spouse who unexpectedly inherits substantial assets from a relative may wish to sign a postnuptial agreement that keeps such inherited property “separate” during the marriage, free from marital claims in the event of a divorce. Or, if a spouse is worried about future infidelity by a spouse who has been unfaithful, signing a post-marital agreement is a logical way to outline the consequences of a lack of faithfulness in a marriage.
A postnuptial agreement can protect each spouse’s interests in the same way as a prenuptial agreement, since they can (and often do) opt-out of the same “default” state marital laws and address the same topics. If a couple desires a premarital agreement but gets married before they have a chance to enter into one, then a postnuptial agreement provides them another contractual means to take control of their marital rights. A postnup can also serve as a mechanism to allow married individuals to agree to alter their marital rights in reaction to some unexpected event (like the examples provided above), tailored to their specific needs at that point in their lives.
However, if a couple plans to enter into a postnuptial agreement instead of a prenup, they are taking a risk (assuming they had sufficient time to get a prenup). Anyone who plans to enter into a postnuptial agreement after their wedding must accept the high risk that the couple might never agree to the final terms of a postnup. What causes that risk? Both parties lose all negotiating leverage and any real incentive to compromise after they say “I Do”. Once married, neither spouse has a compelling reason to sign a contract that affects their marital rights if it isn’t the perfect deal. A couple who decides to enter a postnuptial agreement after their wedding could discover (too late) that they have very different expectations about their marital rights. Many postnuptial agreements drafted by attorneys never get signed because the negotiations broke down and the couples ended up fighting over the terms.
Moreover, since spouses are considered fiduciaries of each other in many jurisdictions, postnuptial agreements generally require the parties to be extra diligent in fully disclosing all of their separate assets and liabilities to each other prior to signing. The enhanced disclosure requirements for a postnuptial agreement provides additional motivation to plan ahead to enter into a prenuptial agreement. Since premarital agreements can always be amended mid-marriage if needed depending on what life throws at a couple, it is usually preferable to enter into a written marital agreement before marriage, if possible.
Prenup Pros® currently offers prenuptial agreements to clients located in VA, FL, NV, NY and NJ. For more information on the firm or to schedule a free consultation with a Prenup Pros attorney or mediator, go to www.PrenupPros.com.
DISCLAIMER: This article and its contents represent the opinions of the author only and (1) is not intended as a solicitation, (2) is not intended to convey or constitute legal advice, and (3) is not a substitute for obtaining legal advice from a qualified attorney. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. The hiring of an attorney is an important decision that should not be based solely upon articles or advertisements.