Prenup vs. Postnup: What’s the Difference and Which Is Better?

Summary:

Prenups are agreements drawn up between couples before marriage that spell out the financial obligations in the event of divorce and protect each spouse’s right to their separate property. Postnups have similar benefits but are signed after marriage. Though marital agreements like prenups and postnups might be seen as transactional and unromantic, they are an invaluable safeguard for soon-to-be newlyweds or couples who have already been married for some time.

Jeff Bezos, founder of Amazon and one of the world’s wealthiest entrepreneurs, made news headlines in 2019 with his jaw-dropping $38 billion divorce settlement. This shocking sum serves as a reminder to the rest of us of the potential value of a prenuptial agreement.

But what if you decided to get married without signing a prenup, and now you regret it? Don’t fret yet — you still have the option of a postnuptial agreement. Let’s explore the key differences between prenups and postnups and weigh their pros and cons to see which might be better for you.

What are prenuptial agreements?

A prenuptial agreement, also known as a “prenup” or premarital contract, is a legally binding marital agreement signed by couples before marriage to determine how their significant assets will be divided in the event of a divorce. This contract can also address specific issues, such as marital responsibilities and spousal support, and may include provisions for children from a previous marriage.

Prenups are far from romantic, but they’re becoming increasingly popular among engaged couples who want to protect their personal and financial interests should the marriage eventually end. There are certain limitations on what can be included in prenups, and they may not be valid in all cases, but drafting the agreement before walking down the aisle can bring peace of mind to couples looking to protect their finances.

What are postnuptial agreements?

A postnuptial agreement, or “postnup,” is an agreement made between two people who are already married. This agreement lays out expectations and arrangements related to marital property division and inheritances, the distribution of assets upon death, debt liability management, and other financial matters between spouses.

Since postnups are drafted after marriage, they can serve as a convenient way for partners to address issues such as changes in assets that occur during the course of their marriage.

The main difference between prenups and postnups

The main difference between prenuptial and postnuptial agreements lies in their timing. A prenuptial agreement is a contract created prior to marriage that locks in the terms of a couple’s finances, property, and assets, should they ever decide to go their separate ways. A postnuptial agreement essentially serves the same purpose, but it is signed after a couple has officially tied the knot.

It’s important to note that neither a prenup nor a postnup can be used to determine a child support amount or decide on child custody after the marriage ends. These decisions are always up to the courts.

Pros and cons of prenuptial agreements

Prenups ensure that each partner’s financial stipulations are clearly laid out and agreed upon before marriage. But there are also some potential disadvantages with prenups that are worth considering before you sign the agreement.

WEIGH THE RISKS AND BENEFITS

Here is a list of the benefits and the drawbacks to consider.

Pros
  • Clarification of financial rights
  • Protection from a spouse’s debt
  • Business ownership protection
Cons
  • Risk of conflict in the relationship
  • Time-consuming and expensive
  • Sense of distrust

Pros of a prenup

  • Clarification of financial rights: Prenuptial agreements make clear the financial rights of both parties in case the marriage doesn’t work out.
  • Protection from a spouse’s debt: A prenuptial agreement can also help protect one spouse’s assets from being used to pay off the other spouse’s debt, such as credit card balances or student loans.
  • Business ownership protection: If either spouse owns a business, a prenup can keep that business separate from other marital assets by outlining how each partner will retain their portion should the marriage end in divorce.

Cons of a prenup

  • Risk of conflict in the relationship: Creating and signing a prenuptial agreement can create tension between two partners if there is disagreement on the terms.
  • Time-consuming and expensive: Although prenups are not legally required, they oftentimes require extensive consultation with an attorney and could be costly and time-consuming.
  • Sense of distrust: Talking about divorce before marriage isn’t romantic and may even create a sense of distrust between a couple.

Pro Tip

Make sure to consult with a family law attorney when drafting a prenuptial or postnuptial agreement to ensure your rights are protected and that the agreement is legally binding.

Pros and cons of postnuptial agreements

Like prenups, postnups can offer a solution for couples looking to protect themselves from future financial and legal entanglements. But while these types of marital agreements have various potential benefits, they also have a few drawbacks you should be aware of.

WEIGH THE RISKS AND BENEFITS

Here is a list of the benefits and the drawbacks to consider.

Pros
  • Ability to address changes in marital dynamics
  • Forces both spouses to discuss personal finances
  • Simplifies an impending divorce
Cons
  • Potential strain on the marriage
  • Less enforceable than a prenup

Pros of a postnup

  • Ability to address changes in marital dynamics: Postnups allow couples to address changing circumstances that may not have been taken into account for a prenuptial agreement. They can also be helpful for couples who didn’t get the chance to create a prenup prior to marriage.
  • Forces both spouses to discuss personal finances: Drafting a postnup gives married couples the opportunity to resolve financial issues before they escalate into larger problems.
  • Simplifies an impending divorce: If you sense that your marriage is on the brink of ending, drafting a postnup will help you to simplify the divorce process by outlining expectations and ownership of financial assets ahead of time.

Cons of a postnup

  • Potential strain on the marriage: Discussing the terms included in a postnuptial agreement can be emotionally taxing and cause feelings of resentment or distrust between couples.
  • Less enforceable than a prenup: Postnups are generally less enforceable than prenups, since courts tend to presume that coercion is more likely when a couple is married and has mixed assets.

Prenup vs. postnup: which is better?

It can be difficult to say whether a prenup or postnup is better because it largely depends on your unique circumstances.

For example, if you’re entering into a marriage with significant assets — like a business or a large inheritance — that you’d like to protect in case of divorce, then a prenup would be the ideal solution, as it will set out how these assets should be divided beforehand.

On the other hand, maybe you’ve already been married for several years. If you want to ensure that any new assets you’ve acquired during your marriage are protected in case you and your spouse get divorced later on, then a postnuptial agreement will better suit your needs.

Ultimately, there’s no one-size-fits-all answer when deciding whether a prenup or postnup is better. Both agreements offer unique advantages that can ensure the security of your rights and assets in case your marriage eventually dissolves.

FAQ

Is a postnup as good as a prenup?

Postnuptial agreements are usually not as enforceable by courts as premarital agreements, since divorce courts will consider various aspects of the marriage when evaluating if the postnup is binding and whether or not to enforce it.

However, although a postnup may not be viewed in court in the same light that a prenup would be, couples may still want to consider one if they failed to sign a prenup before their wedding day. After all, having such an agreement in place after marriage is still better than having no agreement at all.

Is a postnuptial agreement a good idea?

It can be. Like a prenuptial agreement, a postnuptial agreement can help couples to safeguard their assets, especially when one or both spouses have brought quite a bit of individual wealth into the marriage. By signing a postnup, you can also create boundaries with regard to property and finances before trouble arises, as opposed to scrambling to settle issues during a divorce.

How long does a postnup last?

Postnups typically last for the entire length of the marriage. However, some postnups might include a “sunset” clause — a provision in which the agreement expires after a specified number of years.

Do postnups hold up in court?

Whether a postnup will hold up in court depends on the laws of the particular jurisdiction where it was signed. Generally speaking, courts will enforce postnups that spell out how assets and debts will be divided up in the case of a divorce or separation as long as both parties have agreed to its terms.

However, if the postnup agreement discriminates against either spouse or is otherwise unfair, the court might not uphold those terms in part or at all. For example, for a postnup to be enforceable in California, it must reflect “the highest good faith and fair dealing on each spouse, and neither shall take any unfair advantage of the other.”

How long after marriage can you get a postnuptial agreement?

Thankfully, you can sign a postnuptial agreement at any point after you get married — even years or decades later. So if you didn’t get the chance to create a prenuptial agreement before marriage, don’t worry — it’s never too late to safeguard your rights (and your money) with a postnuptial agreement.

How much does a prenup or postnup cost?

The cost of a prenuptial or postnuptial agreement can fluctuate significantly depending on your state, your attorney, and the complexity of your case. Simple agreements can cost as little as $1,000, whereas more sophisticated cases can cost upward of $10,000 per spouse. So if you’re planning on walking down the aisle with your partner soon and you want to make sure your assets are protected in advance, be sure to budget for the cost of a prenuptial agreement on top of the wedding itself.

Are prenups and postnups worth it?

A prenuptial or postnuptial agreement can be worth signing if one spouse has significantly more assets than the other, owns a business, has children from a prior marriage, or has established debts before entering the relationship. Naturally, no one wants to go into a marriage expecting it to fail, but having these legal documents in place could give you peace of mind and protect your financial future.

Key Takeaways

  • Prenuptial agreements are legally binding marital contracts that couples sign before marriage to determine how their assets will be divided in the event of a divorce.
  • Postnuptial agreements function in essentially the same way as prenuptial agreements, with the main difference being that they’re signed after marriage.
  • Prenuptial and postnuptial agreements are both designed to protect the financial interests of spouses in the event their marriage ends.
  • The disadvantages of marital agreements like prenups and postnups include the risk of conflict between partners as well as the expenses and time needed to draft them up.
  • Ultimately, whether a prenuptial or postnuptial agreement is better depends on each couple’s individual circumstances.

It’s unfortunate when a marriage ends, but divorce is an inconvenient reality for many people. If you find yourself single again after years of sharing your personal and financial life with someone else, it’s important to take charge of your individual financial freedom as soon as possible. Fortunately, SuperMoney can help! Start by reading our beginner’s guide to personal finance, then use our comparison tool to find the best money management tools for your needs!

View Article Sources
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  3. Postnuptial Agreements – Association of the Bar of the City of New York
  4. Family Code – Fam, Division 4. Rights and Obligations During Marriage – California Legislative Information
  5. What is a Sunset Clause and why should you care? – Edwards Creative Law
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  9. Personal Finance Beginners Guide – SuperMoney