What’s the real difference and what does it mean?
Either before or during marriage, spouses can enter into specialized marital contracts in which they agree to terms of their marital relationship, terms in case of divorce, or terms that will apply after one or both of their deaths. Contracts between prospective spouses before marriage are called premarital, prenuptial (prenup) or antenuptial agreements that take effect upon marriage. Spousal contracts during marriage are postmarital or postnuptial (postnup) agreements, intended for couples whose intention is to remain married.
Why would a couple want a prenup or postnup?
Most often, people enter into marital agreements for reasons related to wealth, to their families of origin or to their children from previous relationships. For example:
- What – or whose – money will pay debts incurred before and during marriage?
- How can they preserve a pre-existing family business for that partner’s family of origin in case of divorce or death?
- In case of divorce, does the couple want to establish whether to waive spousal support (alimony) or pay it and if so, what will be the terms of an alimony agreement?
- Does each partner want to preserve for themselves in case of divorce their separate, premarital assets?
- Does a spouse want to transfer assets (investments, real estate, heirlooms or other) to children from a previous relationship in case of divorce or death?
- If one spouse owns a share in a professional practice, do they want to ensure that the other spouse does not obtain ownership rights in the practice upon divorce or death?
- Does one spouse want to protect assets if the other has a problem with overspending, gambling or addiction?
- Does one partner want to provide for a disabled or elderly relative if the couple divorces or after death?
- Will the couple file taxes separately or jointly?
- Will they include a provision that either party execute other legal documents like a will or trust after the wedding to carry out the terms of the agreement?
- And more
Valid prenups in Florida
On Oct. 1, 2007, Florida adopted its version of the Uniform Premarital Agreement Act to govern prenuptial agreements going forward. The UPAA requires that a valid prenup be in writing and that both parties sign it. The couple may contract about anything that does not violate a criminal law or that is against Florida public policy. In addition, the agreement may not “adversely [affect]” the “right of a child to support.”
A party may later challenge the enforceability of the prenup in state court, often in anticipation of divorce. If the challenger can prove any of these in relation to the agreement, it will not be enforceable:
- Involuntary execution
- Fraud, duress, coercion or overreaching
- Unconscionability (extreme unfairness) at the time of execution if the challenger did not receive reasonable disclosure of the other party’s assets and debts; did not waive that disclosure in writing; and did not know about those assets and debts and could not reasonably have known
The couple may modify or rescind the agreement during marriage by signed, written agreement.
Sometimes a couple does not have adequate time before the wedding to negotiate a prenup or the need for one is not apparent until after marriage. In those cases, they can execute a postmarital agreement with terms like those common in a prenup (or with any lawful terms they desire).
Get legal guidance
It is important for each spouse to have their own attorney to help negotiate, draft or review a marital agreement of any type. Even in a loving relationship that does not contemplate divorce, no one should sign an agreement that has serious personal and financial ramifications without understanding potential legal issues. It is still a contract and anyone entering into a consequential contract should engage legal counsel for advice and representation.