When most couples enter into marriage, they are not thinking about what would happen in the event the marriage does not last. However, since around half of all marriages end in divorce, it is smart to have a plan in place in the event it occurs.
Every couple can benefit from a prenuptial agreement, but it is definitely a recommendation for those coming into the relationship with significant assets or a separate business. Couples who have already tied the knot can still create an agreement called a postnuptial agreement.
Details of a prenuptial agreement
FindLaw discusses that a main goal of a prenuptial agreement is to protect assets in the event of a divorce. However, it can also outline a range of other provisions, which makes the divorce process less complex and saves time, money and mental stress. Common elements of a prenup include:
- Designate marital and separate property
- Limit liability from spouse’s debts
- Protect a family business or property
- Direct asset distribution
- Provide for children from prior relationships
- Outline the management of joint bank accounts and household expenses
A prenup can also decide future spousal alimony, although it cannot make decisions regarding child custody or support.
Reasons to get a postnuptial agreement
U.S. News and World Report states that some couples choose to do a postnuptial agreement if they did not have time to do a prenup before the wedding. Others get one because there are issues, such as infidelity, in the marriage. Other common reasons include changes in financial circumstances, one spouse starting a business, one spouse deciding to stay home to raise children, or the marriage is essentially over but it does not make sense to get a divorce.
A postnuptial agreement generally contains the same information as a prenup does. However, the terms in a postnup are often more realistic and tougher, as the couple has experienced what marriage is really like.
