When you and your spouse marry, you’ll likely combine each other’s assets under one roof. If there’s ever a divorce, it can be hard to clarify who owns what assets. This asset division process could be made easier by discussing a contract that details each party’s assets they intend to keep and what obligations they have to the other spouse after divorce.
When protecting assets in a marriage, many people create premarital agreements, alternatively, people have the option to make a postmarital agreement. Here’s what you should know:
Defining responsibilities and protecting assets in a divorce
Premarital agreements intend to clarify what assets stay with whom after a divorce. Many people don’t expect to use their premarital agreement, but it can be used as a failsafe if they do unexpectedly divorce or their spouse dies. A premarital agreement may also give the advantage of avoiding marrying someone who just wants you for your money – it’s not just a movie trope.
As the name suggests, a premarital agreement is made before marriage. Conversely, a postmarital agreement is made after marriage – and only after marriage. A postmarital agreement is often made if a premarital agreement was never made or if there are new assets (inheritance, business investments or debt protection) you or your spouse wishes to protect.
Many couples also include alimony in their premarital and postmarital agreements. Alimony allows one spouse to receive financial support from the other if the first makes a lower income or none at all. Typically, alimony allows one spouse to continue living with the same quality of life they had before marriage.
If you already have a premarital agreement and want to redefine what the contract states, then you’ll likely have to make a postmarital agreement. Premarital agreements will void the original terms of a premarital agreement.
It’s not just for the rich
Many people are under the misconception that premarital and postmarital agreements are for people with high assets, however, this is far from true. Anyone who has any kind of asset may want to consider creating one of these legal documents.
If you’re entering into a life-long marriage, you may still want to protect yourself from unexpected events. You may need to reach out for legal help when discussing family law.