Prenuptial and postnuptial agreements are written contracts executed by a couple before or after they got
married to help settle their economic affairs and protect their assets in the event of separation or divorce.
Both prenups and postnups have all the elements of all contracts: offer; acceptance; consideration; mutual assent; legality and capacity. In addition to those elements, the contracts have to be in writing, must be executed voluntarily, must be done with full financial disclosure at the time of execution, must be not unconscionable, must be executed by both parties, and must be notarized.
Both prenups and postnups have had a hard time being accepted by society as they were considered to encourage divorce. The truth is those agreements do facilitate the process of separation by preventing complicated litigation and can prevent unfair situations between couples.
1) The prenuptial agreement
As recently as 20 years ago, prenuptial agreements were not even enforceable because they were
considered against the idea of marriage as the full union of two people, even from an economic point of view.
Prenuptial agreements have more latitude than postnuptial agreements to make restrictive decisions regarding finances. Indeed, the idea is that if one of the spouses does not agree with the contract, the wedding could be cancelled, which is not an option when the contract is drafted after the wedding.
If you don’t make a prenuptial agreement the rules regarding how assets are dealt with at divorce are determined by state law and vary from state to state.
Commonly, a prenup mainly takes care of division of property issues and spousal support arrangements in the event of a divorce or a separation. Prenups can also define how things will be separated in case one of the spouses or both created a business. Also, they can decide how an arbitrator or mediator will resolve future arguments. They can deal with protection from debts meaning that spouses won’t be responsible for each other’s debts.
There is an area of law that neither prenups nor postnup can’t predict or control: custody of the children of the marriage. Indeed, the law believes that decisions regarding custody must always be made with the children’s best interest in mind and therefore cannot be anticipated by the parents. Although true that child custody battles are one of the most difficult parts of a divorce, you can’t restrict child support, custody or visitation rights in a prenup.
It is recommended that both parties hire their own lawyer because prenups can be really powerful (they can for example waive the spouse’s right to share property) and therefore must be as fair as possible.
In the state of California, some issues cannot be integrated in a prenup such as a sanction for infidelity, sanction for using recreational drugs or responsibility for household chores.
Some prenuptial agreements have a sunset provision that specifies that after a certain amount of time or the birth of the first child, the agreement will expire.
Parties may choose the law that will apply to their agreement in case of divorce. If the parties don’t agree on choosing a law, the law of the state where the divorce takes place will apply.
2) The postnuptial agreement
Historically, it took some time for the idea of a postnuptial agreement to be accepted because of the idea that once married, husband and wife become a single entity and therefore should not be able to contract with one another. Since the 1970’s, postnuptial agreements are widely accepted and the California Code states: “the property rights of husband and wife prescribed by statute may be altered by premarital agreement or other marital property agreement”. According to the American Academy of Matrimonial Lawyers, the number of postnuptial agreements has increased in the past five years.
Postnuptial agreements are recognized to be a really helpful tool and may be a good precaution to take. If a couple does such an agreement, it is recommended to draft the agreement when the marriage is going well better than when the marriage starts to deteriorate. This way the spouses will be able to discuss these issues calmly and objectively and anticipate what problems could appear in their marriage: separation of property, inheritance or child support for children from a first marriage, debts (joint or not), spending habits, the role of each spouse if they were to have a business together; the protection in the event of the death of one of the spouse; etc.
Like in the prenup, a postnup cannot outline terms of child support or child custody.
Those agreements can be helpful to get disagreements out of the way before they even become an issue and save the marriage. They can also become the framework for a separation agreement and will save time and legal fees in case the married couple is facing divorce. Postnuptial agreements are especially useful when the situation of the spouses has significantly changed since the wedding day.