Protect Yourself Before and After Merging Lives: The Importance of Prenuptial and Postnuptial Agreements
by Colleen M. Quinn
Talking about a prenuptial agreement may not feel romantic, but it’s a conversation every couple should have. While it can be uncomfortable and even emotional, it’s crucial for those considering marriage. Unfortunately, not every relationship ends in “happily ever after.”
A prenuptial agreement (prenup) is practical, demonstrating both care for your partner and responsibility for your future. It simplifies property division and financial support in the event of a divorce, helping to avoid messy legal battles. A prenup can even act as a financial guide during the marriage, outlining how to handle shared assets and responsibilities. It also safeguards prior relationships and assets, including inheritance, children from previous relationships, and most importantly, your financial independence.
Who Should Consider a Prenuptial Agreement?
A prenup isn’t just for the wealthy or high-profile individuals. Anyone entering into a serious relationship should consider it, especially if you:
- Have children from a prior relationship
- Bring significant assets into the marriage (over $50,000)
- Are likely to inherit substantial wealth
- Own a business or hold a significant stake in one
- Have a fast-rising career with the potential for a high salary
- Will be supporting your spouse while they pursue an advanced degree
- Plan to leave your job to care for children or manage the household
- Know your partner has a health condition that may lead to future financial challenges
- Are considering fertility treatment and the need to preserve eggs, sperm, human tissue, or other individual body parts
Too often, we hear of people who faced unnecessary hardship because they didn’t have a prenuptial agreement. Consider those who supported a spouse through medical or law school, only to later owe spousal support—even to ex-spouses with affairs or substantial salaries. Or those who sacrificed their careers to manage the home, left struggling financially during a divorce.
Transparency Is Key
For a prenup to be effective, both parties must fully disclose their financial situations—assets, income, and debts. Failing to do so can result in unexpected financial burdens during a marriage or divorce. We’ve seen clients lose their life savings because they weren’t aware of their spouse’s debt.
What If You’re Already Married?
If you’re already married, don’t worry—it’s not too late to protect yourself. Postnuptial agreements (postnups) serve the same purpose as prenups and can be entered into at any time during the marriage. We’ve worked with clients who built successful businesses during marriage but ended up at a significant disadvantage during divorce due to the lack of a postnup.
For example, one business owner we represented suffered physical and emotional abuse at the hands of an alcoholic spouse who controlled the family business. A postnup could have helped safeguard the owner’s hard-earned assets and future.
Building in Incentives for Long-Term Commitment
Remember, any contract or agreement can include incentives or sunset clauses that reward long-term commitment. For example, spouses who remain together for ten, fifteen, or twenty years may be eligible for increased financial benefits, recognizing their dedication and support throughout the marriage.