Many people may know a bit about prenuptial agreements. But some might not know about marital agreements, which encompass more than a traditional prenup.
A marital agreement can be a prenuptial agreement formalized before marriage, or it can be what people call a postnuptial agreement, a document typically finalized after marriage.
[Related:What Is a Marital Separation Agreement?]
What Is a Marital Agreement?
A marital agreement is an umbrella term encompassing the documents couples sign to determine how assets would be divided upon separation. These can include prenuptial and postnuptial agreements, and some lawyers also place agreements that dissolve a marriage under this umbrella.
“It’s always better to come to an agreement,” says Megan L. Drury, an attorney in the family law department at Gimbel, Reilly, Guerin & Brown LLP, in Milwaukee. “You want that control. You never want to put it in the hands of the judge; you don’t know what they’re going to do,” Drury says.
What Is a Prenuptial Agreement?
A prenuptial agreement is a legal document that couples sign before getting married. It typically deals with the divvying up of assets and debts after a divorce.
Lawyers suggest revisiting this document throughout the years, as many factors can change. One spouse might get a higher-paying job, for example. Or couples can acquire property together. Any of these changes can be reasons to revisit and add more detail to a prenup.
“We generally say, about every five years, you should look at updating,” Drury says.
Although these conversations can be hard, experts say they are important for transparent communication and can clarify what matters to each person and reduce complexity or confusion.
“If you have this prenup from 25 years ago, what’s the likelihood that that’s still going to be fair today when people’s circumstances likely have changed?” Drury says.
[READ: Can You Get a Prenup After Marriage?]
What Is a Postnuptial Agreement?
A postnuptial agreement is something a couple agrees upon after legally marrying. Couples may opt to create these for many reasons. For example, some don’t consider a prenuptial agreement but then want one. Other couples encounter a situation that changes their financial status, and an agreement now makes more sense. Some couples in a deteriorating relationship want to set terms for how things might be divided should they divorce.
Postnups can be driven by adult children concerned with a second marriage, estate planning or two people trying to rebuild a relationship after a rift.
“It opens the conversation for what you think is fair and reasonable. It opens the conversation for planning,” says Lili Vasileff, a certified financial planner and divorce financial analyst, who has helped many people through marital agreements.
A postnuptial agreement differs from a prenuptial agreement because it can address issues created during separation. Perhaps a couple is living in different households and wants to agree on the allocation of expenses. Other factors, Vasileff notes, can include health insurance or next of kin and medical decision-making rights, which would not necessarily apply after a divorce.
“That’s why a legal separation is different than divorce,” Vasileff says. “You’re still married in many respects.”
A postnuptial agreement may be called a separation agreement if divorce is imminent.
[READ: What Are Irreconcilable Differences?]
What Is Included in a Marital Agreement?
Factors included in agreements are assets, debt, income and expenses. Vasileff suggests ensuring that you solidify plans for certain life events. Consider what happens if a partner dies, becomes disabled, or files for separation or divorce.
Without a marital agreement, courts typically assume that property acquired during the marriage is marital property, with the exception of assets such as inheritance, worker’s compensation awards or third-party gifts.
Finally, agreements should include a duration — for example, five years or 25 years.
What Are Alternatives to a Prenuptial or Postnuptial Agreement?
Other legal options exist for couples hoping to solidify in writing how they assess financial assets.
Some couples, Vasileff notes, fill out what is called a cohabitation agreement, which is essentially a prenuptial agreement but without marriage plans. This can help two partners living together to have similar stability around who owns how much of where they live, for example, and any division of income and assets.
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What Is a Marital Agreement? originally appeared on usnews.com
