Prenuptial and postnuptial agreements are just for really rich folk, right? Actually, they can be a good idea for everyone. So, what are they and why do you need them?
Prenuptial and postnuptial agreements are also called property agreements. The only difference is whether they are signed before or after the marriage. They cover any agreed differences between your wishes and what the law in your state says when it comes to division of property on divorce. They also affect estate planning and can protect certain property from being included in your spouse’s estate. However, they must not contradict certain aspects of law, and thus should always be negotiated with the help of a lawyer.
Interested in finding out more? Here’s why a postnup or prenup can help you even if you are not that rich and even (especially) if you have faith in your marriage.
Why Prenups and Postnups are Always a Good Idea
A property agreement, again, provides for differences from what the law says about your property. In a community property state, all income during the marriage and all property are jointly owned by both spouses. This can cause all kinds of problems. For example, if you go into marriage with a brokerage account, somebody has to work out what percentage of that account is yours and what is your spouse’s, which requires an expensive forensic accountant. They can also protect you from your spouse’s liabilities. Another reason, especially for postnups, is to prevent the court from trying to divide a business that is run by only one spouse. Another issue that might be worth dealing with in a property agreement is the ownership of pets or working animals, especially expensive animals such as horses or show dogs or cats.
Mistakes To Avoid
There are a number of mistakes you need to avoid. One is thinking it’s okay to wait until after you marry. The fact is that you have a lot more leverage during a prenup. Also, once you are married you have financial duties to one another. Postnups are really for situations that develop during the course of a marriage, such as inheritance. Some other things to watch out for include unenforceable conditions. Anything to do with child custody is usually unenforceable if it violates state law that focuses on the best interests of the child. A postnup in particular can be unenforceable if it creates an unfair monetary condition. You can’t say your spouse will receive nothing in the event of a divorce, for example.
A property agreement also needs to not contradict your will; make sure they say the same thing and support each other. And the biggest, most common mistake? Not hiring a lawyer. Even if you are negotiating a postnuptial agreement with a spouse while your relationship is stable and healthy, consider getting your own lawyer to make sure it is enforceable and done within the limits of state law. If any part of a property agreement is unenforceable, a judge is likely to throw out the entire thing. As a minimum, you should have a family lawyer look over the agreement before you sign it.
The best way to make sure that your prenuptial or postnuptial agreement is written in the correct way, legal, and enforceable is to hire a good family lawyer. Shupperd Law has the experience needed to help you and your spouse formalize your agreements and, if necessary, mediate on the details. You may not think you are rich enough to need a prenuptial agreement, but the fact is that they are a good idea for most couples, and will help protect both of you in the event of divorce.