Divorce is seldom thought of when two people are just getting married. However, the reality is that divorce can always happen, even to the happiest couples – often for reasons other than marital conflict. Having a backup plan, even if there’s no plan to use it, could help ease the divorce process.
One of the biggest factors in a marriage is the merging of assets. In a divorce, couples will have to go through an asset division process and many possessions may get lost without proper documentation. This is where prenuptial and postnuptial agreements can come in handy. Here’s what you should know:
How does a prenuptial agreement work?
A prenuptial agreement, or “prenup” for short, is a legal document created before marriage that outlines what assets are expected to return to which person in the event of a divorce. For example, if someone owned their house or car before marriage, then they’re expecting to keep it after divorce.
Another benefit of a prenup is debt protection. A prenup may limit the debt liability if one spouse was the sole contributor to any debt. This means any debt won’t be split during a divorce.
Couples may even agree to alimony in a prenup. Alimony is financial responsibility, typically from a spouse who has a higher-earning salary, to support the lower-earning spouse after divorce.
How does a postnuptial agreement work?
A postnuptial agreement, or “postnup,” isn’t much different from a prenup. They each intend to protect assets in the marriage, however, a postnup is made after the marriage begins. This key difference allows couples to renegotiate what assets are protected in marriage as their circumstances change, such as newfound inheritance or a business.
These legal documents can be confusing without the right legal help. You may need to reach out to know your legal options when creating a prenup or postnup.