If you were to ask a Florida family law attorney “Who needs a prenuptial or postnuptial agreement?” you might be very surprised to find that a significant number would answer, “Everyone.” Many of us consider a pre or post-nuptial agreement something reserved for the super wealthy, however a well-constructed agreement can be beneficial for many couples considering marriage. Divorce is all-too common in our society, and while certainly no couple goes in to the marriage expecting to get a divorce, it happens, particularly in second and third marriages. Later-in-life marriages are often comprised of mature people with children from prior marriages. This group of people are also likely to have considerably more assets than young adults getting married for the first time.
Differences between a Prenuptial and Postnuptial Agreement
It is often thought a postnuptial agreement is simply an afterthought for those who forgot to prepare a prenuptial agreement. In fact, a postnuptial agreement could fall under that description, but can, in many instances, be much different from a prenuptial agreement. Prenuptial agreements tend to be more enforceable than postnuptial agreements, as a postnuptial agreement is a contract between spouses, while a prenuptial is between those planning on being married. Under contract law, there must be some form of consideration—something given in exchange for agreeing to the terms of a contract.
Marriage is the consideration in a prenuptial agreement, however in a postnuptial agreement it is more difficult to show a consideration was given in exchange. A prenuptial agreement discusses how marital assets will be divided in the event of a divorce—in many instances, prior to the accumulation of those assets. On the other hand, a postnuptial agreement is less likely to show any type of consideration exchanged, and, if the distribution appears less-than-equitable, a court may not see fit to uphold the terms. In some cases, a postnuptial agreement is used by couples who are considering divorce; the spouse who wants the divorce is given financial commitments in the form of a postnuptial agreement by the spouse who does not want the divorce.
Prenuptial and Postnuptial Agreements are Simply Insurance for Your Future
In reality, a prenuptial agreement is nothing more than a document which can allow future spouses to plan ahead, allowing a little extra predictability and security. Most all of us have a variety of insurance plans in our lives. We have life insurance, health insurance, insurance on our automobiles and insurance on our homes. These insurance policies cover the “just in case” situations in our lives. As in, just in case we fall ill, just in case we back into someone in the parking lot, just in case a flood damages our home. A prenuptial or postnuptial agreement is really no different, and, rather than something that undermines the vows of marriage, pre and postnuptial agreements should be looked at as just another form of insurance.
Goals of a Prenuptial Agreement
Most commonly, a prenuptial agreement is used in cases of a second or third marriage when one or both spouses want to ensure their children from a prior marriage are taken care of, or in cases where one spouse has considerably more financial assets than the other. As an example, two people in their fifties get married, with one spouse moving in to the home of the other. The spouse with the home has owned the home for a very long time, and wants to ensure the home will go to his or her children eventually. A prenuptial agreement could exclude the home from the couple’s marital assets, ensuring it would go to the children. Properties can be identified, in a prenuptial or postnuptial agreement, as marital or non-marital assets. Prenuptial and postnuptial agreements can also lay out the details for spousal support, in some cases, based on the number of years the couple have been married.
Who Needs a Premarital Agreement?
An open conversation regarding assets and debts is important between couples considering marriage or those who are already married. Particularly when one spouse is giving up a home, a good job, or anything of significance for the other, a premarital agreement should be considered. If one or more of these items apply to you, it could be a good idea to have a premarital agreement:
• One or both of you have children from a prior marriage;
• One or both of you is expecting a future inheritance;
• One or both of you own your own business or are part owner in a business with another person;
• You own property, including real estate, automobiles, art, stocks or bonds or any other valuable items;
• One or both of you are in the process of obtaining a degree for a profession such as law, medicine, or any other particularly lucrative career;
• One or both of you take care of loved ones, including parents, or
• One of you will be supporting the other as they attend college.
What Premarital Agreements Can Address
A premarital agreement can deal with ownership of a home, how property brought into the marriage by either spouse will be divided, how premarital debt, such as student loans, will be handled, how disagreements regarding the prenuptial will be addressed, and obligations of one party regarding spousal support in the event of a divorce. Some premarital agreements include what is known as a “sunset clause.” This clause will void the premarital agreement following a specified number of years.
What Premarital Agreements Can Not Address
There are some things premarital and postnuptial agreements cannot address, legally. Issues such as child visitation or custody and child support may not be addressed in a prenuptial agreement. The agreement may not include anything which is contrary to Florida laws, or anything which appears to encourage a future divorce. In other words, the premarital agreement must be equitable under Florida law.
Protecting Your Financial Future with a Premarital Agreement
Premarital agreements are most often invalidated because one or both spouses failed to disclose all assets prior to making the agreement. It is extremely important that both parties have legal representation prior to signing a prenuptial or postnuptial agreement and that all assets are properly disclosed. The Family Law Place attorneys believe a good premarital agreement is an investment in your future. We also understand it can be hard to discuss details about a premarital agreement during such a hopeful time in your future, however thinking about it as simply another form of insurance can help change your perspective on a prenuptial or postnuptial agreement.