Prenuptial and postmarital agreements each establish financial and property rights of spouses for their marriage. But the prenuptial agreement is signed before the marriage begins, and the postmarital agreement is signed after the marriage begins.
Many people regard these agreements as devices to protect the assets of a wealthy spouse from the other spouse in a divorce. But that is only one possible use for these agreements.
More often than not, these agreements protect the assets of both spouses not from each other but from creditors, whether one spouse has more wealth than the other or not. For example, a lawsuit against one spouse will likely not affect the property and income of the other spouse,if the properties and income of the couple are completely separate.
Tax liabilities and business debts of one spouse will also likely not affect the property and income of the other spouse, if the proper prenuptial or postmarital agreement is in place.
These agreements can be useful in second marriages, too. Perhaps one or both spouses wish to protect property for the benefit of children of prior marriages.
In addition, prenuptial and postmarital agreements will minimize legal expenses in the event of death or divorce. It's better to make sure in advance that your property will go where you want it to go, instead of paying attorneys to decide the issues later
Couples are free to draft the terms of their agreement in a variety of ways. They can characterize any of their property or income to be "separate," which means it is owned individually, or "community," which means it is owned jointly. They simply need to designate the particular assets or income as "separate" or "community" in the agreement.
The couple can designate property acquired in the past and property to be acquired in the future. They can designate income from the past and income from the future.
How much will the prenuptial or postmarital agreement cost? It depends on the complexity of the case. But the cost of the agreement will be far less than the cost of not having the agreement when it is needed in the future.
Some people think it is unromantic to have an agreement that establishes separate ownership of various assets and income. But isn't it wise for each spouse to protect the other spouse from possible creditor problems in the future? With the proper agreement, if the husband is sued, his wife's assets will likely be protected. If the wife is sued, her husband's assets will likely be protected.