Understanding Pre-marital vs. Post-Marital Agreements
Couples who are looking to get married or who have recently wed may want to consider making an agreement to protect each party’s assets. Likewise, if you’re looking at a divorce, it is crucial to factor in any pre-marital or post-marital agreements that may have been signed. As their names suggest, a pre-marital or “pre-nuptial” agreement is signed before marriage, while a post-marital or “post-nuptial” agreement is pursued after the wedding has taken place.
While similar in nature, these agreements do have some significant differences. It’s important to take the time to understand what each has to offer as well as any limitations that may be involved.
Signed before legal marriage, a pre-marital agreement can make any future divorce a very straightforward process. California has what is known as fiduciary duty, which means that people are legally and financially responsible to each other once they are married. Once this is established and assets are merged, it can be extremely challenging to alter the terms either during marriage or in the event of divorce. This is why pre-marital agreements exist. As long as both parties agree to the terms, assets and property can be protected in advance.
In essence, a pre-marital agreement establishes what assets belong to which party and who will receive what in the event of divorce. In the state of California, there are some exceptions, especially when it comes to spousal support (which may be determined later on). Likewise, child support and custody must also be determine later in the event of divorce.
In accordance with California law, all pre-marital agreements must be completely finalized a minimum of one week before the legal wedding. Some attorneys actually will not take pre-nuptial agreement cases if the wedding is less than two months out. Many recommend starting the process at least four months in advance to give adequate time to each section.
Post-marital agreements not as effective as pre-marital agreements because of the establishment of fiduciary duty upon marriage. They do provide a viable option for people who did not sign an agreement prior to the wedding yet still want some kind of legal security in place. Similar to a pre-marital agreement, a post-marital agreement dictates how the couple’s assets are to be divided in the event of divorce.
Due to California’s fiduciary laws, post-marital agreements are stricter when it comes to how assets can be rearranged. In order to be considered legally valid, all rearrangements must be demonstrated as beneficial to both parties involved. If this is not clearly shown, then there must be an explanation as to why the decisions were made.
Many people seek out post-marital agreements in the event of infidelity or some other major event that has caused the strength of the marriage to change. With this in mind, a post-marital agreement can actually help prevent divorce by alleviating some of the risk of staying married. Many others sign them simply due to financial changes or other circumstances without the potential of divorce looming as a possibility.
Who Should Get a Marital Agreement?
Pre-marital and post-marital agreements are not for everyone. The good news is that California already has various separate property protection laws in place that will help in the event of divorce. In fact, couples who keep their finances separate during their marriage will not face many issues when it comes to dividing up other assets during the dissolution of that marriage. However, this is only true if they live in California for the duration.
Other states have different laws, and this is worth taking into account if there is any possibility of relocating during marriage. Furthermore, those who do plan to open a joint bank account or otherwise merge their finances would be wise to invest in a pre-marital agreement. This is also true for those who would like to keep property they are both paying for separate.
Older couples with larger estates and/or children will also have more of a need for a marital agreement than younger couples entering marriage with little-to-no assets.