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What differentiates a postnuptial from a prenuptial agreement?

On Behalf of | Nov 21, 2023 | Family Law |

The terms “prenuptial agreement” and “postnuptial agreement” refer to legal documents that can play a crucial role in outlining a marriage’s financial and asset-related concerns, yet they differ significantly in their timing and purpose.

Understanding what these documents do – and when they can be executed – can help individuals to make more informed choices about their rights and options.

What is a prenuptial agreement?

This is a legal contract entered into by a couple before they get married. Its primary purpose is usually to establish each party’s financial rights and responsibilities in the event of a divorce or death. Prenups are crafted to address various concerns, which may include certain expectations related to married life.

Common key features of a prenuptial agreement include:

  • Asset division: Clearly outlines how assets acquired during the marriage will be divided.
  • Spousal support: Specifies whether alimony or spousal support will be provided and under what conditions.
  • Debt allocation: Determines how debts incurred during the marriage will be assigned.

Prenuptial agreements that are focused on financial matters tend to be particularly useful when future spouses own a small business and/or significant financial assets when entering their union.

What is a postnuptial agreement?

Contrary to a prenuptial agreement, a postnuptial agreement is established after a couple has already tied the knot. It serves a similar purpose in defining financial arrangements but is executed during the marriage. Couples might opt for a postnuptial agreement for various reasons, such as a change in financial circumstances or a desire to clarify existing arrangements.

Common key features of a postnuptial agreement include:

  • Financial adjustments: Allows couples to modify financial agreements during the course of their marriage.
  • Asset clarification: Like prenups, postnuptial agreements can clarify a potential division of assets but can address changes in circumstances.
  • Crisis management: Provides a framework for handling unforeseen financial challenges within the marriage.

While a prenup often serves as a proactive measure to establish financial expectations before marriage, a postnup offers flexibility for adapting to changing circumstances during the marital journey. Whether considering a prenuptial or postnuptial agreement, seeking legal counsel is essential to help ensure the agreement serves both parties’ best interests.

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