Prenup vs Postnup: What Differences Should You Know?
Did you know that divorce rates have been at an all time low? That’s right – the past few years have shown a consistent low of both divorces and marriages. Although divorce has become less frequent, the need for a prenup or postnup may still be in your best interest.
Why not contemplate the potential end of your relationship while you share a mutual respect for your significant other instead of when both sides are blinded by emotion and rage?
While we hope for nothing but the best for you and your spouse, the truth is that having a plan for some of the worst-case-scenarios is the best possible choice for everyone involved. Sure, these legal agreements can harbor a bitter taste for some when the idea of a prenup is suggested, seemingly implying like the relationship is doomed to fail. However, that is not the case. In the world of prenuptial and postnuptial agreements, there’s a lot each party can benefit from.
What is a prenup?
Between shows on television and real life divorce stories, you’ve probably heard the term “prenup” before. With a goal of itemizing each parties assets and allocating how each asset will be distributed upon either death or divorce, the benefits of a prenuptial agreement is primarily to protect the financial assets of each party prior to getting married.
When drafting a prenuptial agreement, having a financial advisor, as well as a lawyer that specializes in the practice of family law will help you review your financial goals and any pre-existing assets to determine how and when each item will be distributed as well as when child support is to be disbursed in the event of marital separation or death of a spouse.
What are the benefits of a prenup?
Having a prenuptial agreement in place prior to marriage has a number of benefits. Primarily, in the event of either a divorce or passing of a spouse, a prenuptial allows for an expedited legal process, as everything has already been arranged. With a prenup, you avoid the potential of costly court fees and unnecessary stress during an already difficult time. Additionally, each party is able to enter the marriage with clear expectations on how their current and future assets (even assets from a previous marriage) are protected and disbursed, creating an additional layer of peace of mind during the union.
What are the cons of a prenup?
While the best interest of each party is generally preserved when securing a prenup, there are a handful of drawbacks that may make the process less enticing. To begin, there’s the very evident fact that discussing prenuptial agreements is not very romantic and may come off as a distressing topic to your partner. Additionally, there is the risk that the agreement may favor one spouse, or not hold up in court if inappropriately drafted.
Further, such issues as timesharing with the children, division of parental responsibility, parental relocation and child support can not be addressed in a prenuptial agreement.
What is a postnup?
Remarkably similar to a prenup, a postnuptial agreement is the same legal document geared towards spousal support, splitting up assets related to real estate, property, and inheritance, but the main difference is that this agreement is curated after your vows have taken place.
What are the benefits of a postnup?
Postnuptial agreements are a great way to modify existing agreements, or to simply add any new assets that may have been actualized following the marriage. Outside of being able to amend what is already there, postnups provide a way to establish expectations if no prenup was formed.
What are the cons of a postnup?
Similar to the perceived disadvantages of a prenup, postnups may make your partner feel like divorce is inevitable. Additionally, there is some concern that a judge may not recognize a postnup as easily as they would a prenuptial agreement.
The factors to decide whether prenup or postnup should be agreed on
If each individual feels that forming an agreement may be in their best interest, it begs the question, which option is best? Here are our recommendations on which process may be more favorable based on a few key factors.
Which one is more costly?
Before making your choice, be sure to research the costs associated with each based on the state you're living in and the potential complexity of the document. Florida ranges around $1,000. Most often, prenups are the more straightforward documents, and therefore, are less expensive.
Does the state I live in affect a prenup or postnup?
Absolutely! As previously discussed, we strongly suggest that you become well acquainted with your state's prenup and postnup requirements to ensure that you have everything you will need to properly execute the legal document.
It is also important to discuss what state law will be applied to enforcing these agreements in the event a party or parties relocate to another state before a divorce or other situation in which the agreement needs to be interpreted or enforced.
Look into the assets both partners have when deciding a prenup or postnup
In the event that a couple with no large assets or inheritance decide to get married, the need for a prenup may not be present; however, this could change during the span of the relationship and affect whether or not a postnup is needed. Assessing assets at the time of marriage, as well as any anticipated wealth or real estate can be a lage determining factor on which option will benefit your relationship the most.
Almost without exception the parties to these agreements will need to exchange some form of affidavit or financial disclosure reflecting their respective holdings, debts, incomes, etc. so as to establish an arms length, fair and transparent transaction.
When looking for legal advice, know that Busciglio, Sheridan and Schoeb are here to answer all your questions!
Whether it’s family law, criminal defense, insurance claims, probate and estate, or personal injury claims, we’re your partners in law. Offering premium representation that’s focused on you and the ones you care about, you can always trust us to get to the bottom line and handle your legal issues with care and efficiency. Contact Busciglio, Sheridan and Schoeb today.