We're going to level with you for a sec: Not all aspects of planning a wedding or getting married are sexy and romantic. From family drama to money talk to planning for the legal implications of tying the knot, there are all sorts of details to consider that are a far cry from how you'll frame your first kiss or which champagne you'll toast with. Case in point: the prenuptial agreement.
About as unsexy as you can get, a prenuptial agreement, AKA prenup, is all about assets (and not the muscles and curves kind). And while you may draft a prenup you both feel great about right now, your lives won't stay the same forever, and in a few years, you may find yourselves seeking a document that better defines how your new and growing assets will be dealt with in the event of a death or divorce (we told you, not romantic). That's where a postnup comes in. More than just prenup, part two, we turned to attorney Jenifer Foley, founding partner at Alter, Wolff & Foley LLP. She specializes in family and matrimonial law, making her the perfect person to break down prenups, postnups, and everything in between.
Let's start from the beginning. What exactly is a prenup?
"A prenuptial agreement is a marital contract that defines how you and your partner will deal with assets, liabilities, and/or financial support in the event of a death or divorce," Foley explains. "It's treated just like any other contract (meaning it's handled differently in every state), and it forces couples to figure out how they'll deal with their finances going forward." Foley's job is to ask clients the tough—and sometimes unpleasant—questions to make sure they're accounting for as many future scenarios as possible before they sign on the dotted line. "I've seen marriages put off, and even canceled, because of prenup negotiations," she says.
"Not long ago, it was common for people (especially women) to feel forced into signing prenups without proper counsel or time to review," Foley describes. "That is why it is so important to be on equal footing and have an equal understanding of the document before you sign." You'll go through all of the assets you currently have, whether it's money in the bank, a home, or a business, and determine what will happen to those assets if something happens to you. The one thing a prenup doesn't cover? Future kids. "Because they're not born yet, you cannot use a prenup to determine what is in the best interest of a future child," Foley explains. We all know life is unpredictable, which is why some prenups include a sunset clause.
What is a sunset clause?
This clause in a prenuptial agreement acknowledges that things can change. "It states that a married couple will only honor the prenuptial agreement for a certain number of years. What sounds fair when you're first married may not seem so after a few years together, and a sunset clause states that, after being together for a given amount of time, you can either have your prenup terminated or create a new agreement or new terms that make more sense for both parties," says Foley.
Why should we have a sunset clause?
"Without a sunset clause, your prenup remains the same as the day you drafted it," Foley says. "It will still function the same as any other contract (meaning you can modify it or agree to end it), but a sunset clause sets a specific date for doing so." While your prenup may still be valid, drafting one forces you to make a lot of important decisions in advance, and there are contingencies and changes (like illness, children, or a career change) that might make those decisions seem less fair or not apply as directly to your lives. If you decide to end your prenup and draft a new agreement, your married status means you'd be setting up a postnup.
So, what's a postnup?
"A postnup, or postnuptial agreement, is an agreement you enter into after you're already married," Foley explains. "Like a prenup, it deals with how you will share assets, liabilities, and support moving forward. Unlike a prenup, a postnup can cover support and plans for any children you've had together since your prenup was signed." The other major difference is leverage: With a prenup, you could simply refuse to get married if you didn't agree with the terms, but with a postnup, your leverage would involve getting separated or divorced.
When can we get a postnup?
"A postnup is a contract, just like a prenup, so you can create one whether or not you had a prenup or included a sunset clause," says Foley. "As long as both parties agree, you can create any agreement you want. If you already had a prenup, you can also opt to simply modify it instead of drafting an entirely new agreement." If you didn't have a prenup before you got married, you can still work with your lawyers to draft a postnup. "Often couples choose to create a postnup even when they're happily married, using them to address things like an inheritance, a new business partnership, or even school loans. It can assure that certain things stay separate—or that you will share an asset or liability in a specified manner—and have everything in writing so it's clear and enforceable."
Well, there ya have it, folks.