Dear Kiwi and Mango,
My brother is getting re-married and is on the fence about a prenuptial agreement. My husband and I actually have a postnuptial agreement. Aren’t they essentially the same thing? Which is preferable? Can you help me convince my brother to get one or the other, since I feel like it is crucial, especially in a second marriage? Thanks for your help!
Mary Duggan
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Dear Mary,
Congratulations to your brother and his bride-to-be!
Getting married is of course a special time in the lives of many people. However, not all marriages last forever. To protect themselves in case of a divorce, some couples create a legal agreement to define what would happen if they split up. Perhaps more often, couples getting married later in life sign a prenuptial agreement to govern what will happen to their estate when one of them dies before the other (see today’s Ask the Expert article for more information on this).
A prenuptial agreement is written prior to the marriage, and spells out the financial obligations that the estate of the deceased spouse will have towards the surviving spouse if any, when the first spouse dies, and also addresses what happens if the couple gets divorced. A postnuptial agreement is done for the same reasons, but is written after marriage.
Differences Between a Prenup and Postnup Agreement
A prenuptial agreement and a postnuptial agreement are essentially the same documents done for the same reasons. However, there are some distinct differences, as follows:
- A prenuptial agreement is created and finalized before a couple gets married. Because of this, a prenuptial agreement can often be a bargaining chip for when and if the couple actually gets married. A postnuptial agreement is signed after marriage, when neither spouse has any real leverage, so it can’t serve as a bargaining chip.
- Both documents describe how a couple’s assets will be split in the event of a death or divorce, along with any financial obligations that the estate of one spouse may owe (or not owe) to the surviving spouse.
- While prenuptial agreements address the current financial condition of both parties, their focus can also be on the future growth of the couple’s finances. By comparison, a postnuptial agreement typically occurs after the couple has been married for a while, and is generally more focused on the current income and assets of the couple.
The Importance of a Prenuptial Agreement
Any time people are entering into a second (or subsequent) marriage, Mr. Farr strongly recommends a prenup. Although not always as strong as using trusts, prenups can pave the way for good estate planning.
Many people think of a premarital agreement as only dealing with what happens in the event of a divorce. However, the most important reason for a premarital agreement is to determine how your estate will be distributed if one of you dies during the marriage, especially if your marriage becomes a long-term marriage (which, of course, is the intended goal of all marriages).
Even if you have already completed an estate plan of your own, a new marriage typically calls for significant changes to your plan.
Mediation is Often Used for Prenups and Postnups
Many couples who have a prenup prefer to go through this process together, via mediation, in order to minimize the expense and avoid the adversarial nature of being represented by two separate attorneys. By going through mediation in an effort to develop a written agreement and estate plan, you will meet together with the mediator and come to a mutually acceptable agreement that resolves all financial and legal issues that may arise in connection with an upcoming marriage, an existing marriage, or co-ownership of property.
Mr. Farr is a trained mediator and is available to mediate premarital contracts with couples planning to enter into a second or subsequent marriage, with a goal of preparing the agreement and then doing the subsequent estate planning for the couple. Learn more here.
Hope this helps!
Kiwi and Mango
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