When couples marry, they will have to deal with several concerns. Undeniably, finances are one of the primary topics up for discussion. While partners generally have no problem sharing in the marriage, having protection over one’s assets can be a good practice. No couple wants to end their relationship in a divorce, but it is not an impossible occurrence. This is why it is common for couples to enter into prenuptial (prenup) and postnuptial (postnup) agreements, which lays down what will happen to each’s financial assets in case of a divorce or death.
What is the difference?
The main difference between the two is the time when couples enter into the agreement. As their names suggest, prenups are agreements couples sign before the marriage, while postnups are ones they sign after. So, how do you know which one you should enter into? There is no firm rule when entering into these kinds of agreements. It all boils down to the unique situation of each couple.
Usually, couples with a significant amount of personal assets or debts before marriage enter into prenups. On the other hand, spouses who experience substantial changes in finances due to inheritance or debt acquisition proceeds may later think that entering into a postnup would be a good idea.
How do these agreements protect me?
A valid prenup or postnup will protect an individual from falling into a financial disadvantage in case they decide to divorce or one of the spouses dies. Texas is a community property state and divides marital assets and debts equitably between divorcing spouses. It would be a disadvantage if one spouse substantially gains more assets or debts during the marriage.
Moreover, with costly and complex divorce proceedings, these agreements can help simplify the property division process for separating couples. Spouses can also set a spousal support amount instead of paying one ordered by the court.
Prenup and postnup agreements are great tools for financial protection and security. Couples entering these contracts should consider factors surrounding their relationship to ensure the agreement aligns with their needs.