Postnuptial and Prenuptial Agreements: Marital Agreements Can Lead to Stronger Marriages
Couples get married because they are in love, but their reasons for divorce tend to be complex and diverse. Sometimes, however, divorces can be avoided with some foresight and a marital agreement.
While it may not be romantic to write up a prenuptial or postnuptial agreement, these marriage contracts can strengthen a couple’s relationship. They set out each spouse’s property rights and responsibilities if there should be a divorce or, sometimes, death. These agreements help parties address major financial stressors together before they divide the parties and lead to divorce. If done properly, parties will not fear financial ruin or abandonment during marriage and will have clear expectations of what they will be entitled to after divorce or death.
The major difference between a prenuptial/postnuptial agreement is the date these documents were signed. The former is a contract written up prior to a couple’s marriage and the latter takes place after the couple is married. If you don’t have an agreement, California’s community property laws will govern distribution of assets and define responsibilities based on the characterization of your property, your unique relationships and circumstances, and the judge’s discretion.
Both of these contracts are far more common today than they once were. In the past, marriage was often feared by some who believed they would lose everything if they were to divorce. Initially, these contracts were primarily sought out by high-net-worth couples, but now they are more popular among all income earners. These contracts both require a skilled and experienced California family law attorney who can ensure that your resources are protected. Johnson Attorneys Group has experience drafting these types of agreements and can help you create one today.
Postnuptial and Prenuptial Agreements: The Differences
The “Prenup,” or prenuptial agreement, typically will provide provisions for the division of premarital and marital assets and alimony in the event of a marriage dissolution. These contracts are created based on the specific needs of the couple who are getting married, prior to any problems that threaten their bond.
In contrast, a “Postnup,” or postnuptial agreement, is drafted and executed after a couple is married, and may even update an existing prenuptial agreement. That’s because the circumstances of any marriage may change over time and warrant a new contract between spouses who want to avoid a bitter and contested divorce. Additionally, a couple may opt to create a postnuptial agreement at a time when they foresee a possible divorce, as a way of avoiding a potentially expensive and public legal battle. A well-written postnuptial agreement can drastically reduce attorney’s fees and costs.
When to Create a Postnuptial and Prenuptial Agreement
Parties should consider drafting a prenuptial agreement at least six months prior to their wedding date. Married parties should consider a postnuptial agreement around major life events such as the birth of a child, purchase of a property with separate funds, or building a business. Many practical couples see these contracts as a way of making sound financial decisions. Without such a contract, a divorce may lead to anger and resentment that can set off an expensive and messy divorce.
What items should a postnuptial and prenuptial agreement involve? Here are some things to consider:
- Property rights (premarital or marital property);
- Financial obligations;
- Business ownership and division of profits;
- Debt management;
- Division of real estate assets and debts; and
These agreements help to simplify the division of assets and responsibilities at a time when the couple is not at odds or angry with one another. It’s calmer, simpler, and can save substantial amounts of money in legal fees.
High-Net-Worth Postnuptial and Prenuptial Agreements
The legal battles in the news usually involve celebrity or high-net-worth couples that failed to obtain a prenuptial or postnuptial agreement with their spouses.
One notable celebrity that comes to mind is Amazon founder Jeff Bezos who married without a prenuptial agreement and whose assets were valued at $136 billion. Bezos was divorced in Washington, which is a community property state like California. The divorce resulted in Bezos’ wife becoming one of the wealthiest women on earth. This is not to say that MacKenzie Bezos did not deserve the wealth she was awarded. The example is used to highlight the fact that the outcome could have been incredibly different if an agreement was in place.
Our clients come from all walks of life. Some are family business owners or entrepreneurs who want to ensure they don’t lose their business in a divorce. Others may be entering a second marriage and wish to preserve their assets for children from a prior marriage or protect themselves from being depleted of their resources as they get older. If you and your spouse are a high-net-worth couple, a prenuptial/postnuptial agreement may be in your best interest.
Need help drafting a prenuptial/postnuptial agreement in Los Angeles County or Orange County? We can help.
Regardless of your reasons for choosing to create a prenuptial or postnuptial agreement, it’s important that you find a skilled family law attorney who is experienced with both simple and complex divorce and marriage contracts. Johnson Attorneys Group, located in Newport Beach and Los Angeles, serves all of Los Angeles County and Orange County. Our attorneys have ample experience with these matters and have earned a reputation for being trustworthy and reliable.
Call Johnson Attorneys Group at (949) 942-8784 to request a private consultation with our Los Angeles County and Orange County family law attorneys.