Prenuptial and postnuptial agreements can be important documents when it comes to safeguarding your assets. Protecting your wealth is the main goal of the experienced attorneys at our law firm. Take control into your own hands and ensure the courts won’t be the ones to decide how your assets are distributed in the event of a divorce. Please see below for the most frequently asked questions regarding prenuptial and postnuptial agreements.
What is a prenuptial agreement?
A prenuptial agreement, also known as an antenuptial agreement, or premarital agreement are most commonly referred to as a prenup.
As its name suggests, a prenup is a written and enforceable contract entered into by a couple prior to marriage. A prenup allows the couple to select and control a variety of legal rights they obtain when marrying. It can also control what happens when the marriage ends either by divorce or death of one of them. In certain cases, a premarital agreement could also specify waivers regarding a surviving spouse’s right to claim an elective share of the estate of the deceased spouse.
In the absence of a prenuptial agreement, the default marital laws of the state would apply in the event of divorce, such as the rules regarding the division of property, retirement benefits, savings, and alimony. Each state has its own laws regarding the validity and enforcement of prenuptial agreements. Which state’s law should apply to a particular case depends on where the marriage took place, where the couple was living during the marriage, and what law the agreement specifies should apply.
Are prenuptial agreements a good idea?
The demand for prenuptial agreements in the United States has increased in recent years, mainly due to millennial couples getting married. According to the American Academy of Matrimonial Lawyers, most lawyers saw an increase in prenups among millennials. This should not be surprising. Millennial couples are getting married later in life and tend to date longer before getting married. This means couples have longer to create wealth, accumulate assets, and think about what their goals and expectations are when entering into the marriage.
Millennial couples are also most likely to carry student debt. Without a prenuptial agreement to address this point, you may be left responsible for half of your spouse's outstanding debt in case of a divorce.
When should I get a prenup?
Prenuptial agreements can be important when one individual in the couple has significantly more assets or income than the other. As stated earlier, they should also be considered when one or both individuals have significant amounts of debt and they would rather protect their future spouse from potential liability down the road. That being said, the discussion of a prenup should be raised long before the planned date of marriage. Ideally, both partners should have the opportunity to consult with separate legal counsel before committing to signing an agreement. Discussing a prenup shortly before the wedding date is strongly misguided, and in some cases that fact could be used to overturn the agreement.
What assets will I be protecting in a prenup?
A prenuptial agreement can address all of the following matters:
- Personal property, business assets, children from a prior relationship, collectables of value, and any financial worth
- Consider if you may make a substantial amount of income, purchase a significant amount of real estate, expect to receive an inheritance, or win a lawsuit or settlement during the marriage
- You will also want to detail any limits on alimony should the marriage fail
- Allocation of debt between the spouses
- Attorney’s fees
What happens if I have a prenup and get divorced?
- Ensure your agreement was properly signed and acknowledged
- Work with your attorney to determine if your prenup included adequate disclosures of your finances and if both parties followed obligations laid out in the prenup throughout the marriage
- Find any and all written documentation between you, the attorney who drew up the prenup, and your former spouse as it may be necessary to present in court
- Seek the advice of an attorney before making changes to your will or trust, but you will want to ensure that your former spouse is no longer listed in these estate planning documents
What is a postnuptial agreement?
A postnuptial agreement, also known as a “marital agreement” in Colorado, or postnup, is similar to a prenup however, it is entered into agreement after the marriage or civil union takes place. A postnup is for couples who intend to remain married and addresses the same matters as a prenup such as division of assets, finances, property, etc. and details what happens in the event of a dissolution of marriage through death or divorce in regard to spousal support. A post-nuptial agreement prepared in anticipation of or as part of the divorce process, can be declared unenforceable.
Is a postnup just as valid as a prenup?
On their face, both a prenup (before marriage) and a postnup (after marriage) are equally valid under the law. However, once you say, “I do”, a significant amount of both partners’ assets become marital property. The postnup should detail plans for these marital assets as well as future earnings.
What is marital property?
Marital property generally means property acquired during the course of a marriage, such as income from employment or business generated during the marriage. Property that an individual owned before a marriage is not considered marital property, but instead separate property. Inheritances or third-party gifts given to an individual during a marriage are also not marital property.
What is considered marital property will vary from state to state. Marital property generally includes property a couple buys together during their marriage, such as real estate, cars, furniture, etc. Bank accounts, retirements accounts, investments, are also marital property if the income to fund these was earned during the marriage. In community property states, all assets acquired during a marriage are considered marital property and is considered owned by both spouses equally.
Does marital property apply to common law marriage?
No. Most states do recognize common law marriage however, the length of time that needs to pass in order to be recognized will vary by state. Under common law marriage, each individual’s assets belong solely to each individual person. The only exception to this is if both parties' names are on a legal title document for a home, vehicle, or account. Under common law, if one party passes away, distribution of assets will take place via the will, trust, or under probate.
Why Mile High Estate Planning?
The attorneys at Mile High Estate Planning are specialists when it comes to protecting your wealth. A prenuptial or postnuptial agreement can be an effective solution to ensure your financial wellbeing is safeguarded in case of divorce. If you would like to discuss whether a prenuptial or postnuptial agreement is right for your situation, please contact Mile High Estate Planning to schedule a free, no-obligation consultation.