No one engages in thinking about how their marriage could end in divorce someday. In fact, most couples fail to consider this possibility, even though statistics indicate roughly half of all marriages could end in divorce. This means that, even if you think you don’t need it, you will benefit from considering how you can protect your long-term financial interests.
One way to do this is by drafting a marital contract. There are both prenuptial and postnuptial agreements, providing you with two opportunities to secure your interests in case of a divorce in the future. These agreements provide legal and financial benefits to couples of all income levels, meaning you do not have to be wealthy or possess valuable assets to benefit from one of these contracts.
Prenuptial agreements
The drafting of prenuptial agreements takes place before a marriage. The contract involves both parties giving full financial disclosure and discussing how they want to divide marital property in the event of a divorce. They can also talk about division of marital debt and specify which assets are separate. A prenup can also include terms that may outline the financial responsibilities of each spouse over the course of the marriage.
Postnuptial agreements
The drafting of a postnuptial agreement takes place after the marriage. This is common in situations where one or both spouses have seen a significant increase in income and wealth after they marry. Like a prenuptial agreement, it can include terms that will outline how the couple will divide marital property after their divorce. It can reduce the chance of costly and stressful litigation over money and property if the marriage ends.
Clarity and enforceability
In a contentious divorce, it is common for the terms of a prenuptial or postnuptial agreement to come under intense scrutiny. This is why it is critical for the terms of this type of agreement to be clear and enforceable. Unfair terms, unclear wording or other problems could result in a judge ruling some or all of the agreement invalid.
Before you walk down the aisle, you may want to consider how you could benefit from a prenuptial agreement. If you are already married, it is not too late to craft an agreement that can provide you and your spouse with peace of mind regarding your long-term financial interests.