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No one wants to imagine that their marriage is going to end in divorce, but if a couple has complicated financial lives, including real estate or business holdings, coming up with a plan for what happens to those assets before they’re in the midst of the emotions of a divorce can be a sensible course of action. Generally, marriage is considered a financial partnership in addition to a romantic one, and in California, assets that are acquired during the marriage are considered “community property” and are divided evenly between spouses if there is a divorce. People who aren’t married and have no plans to get married can also enter into co-habitation agreements. Both a prenuptial agreement and a postnuptial agreement is a way for people who are engaged or who are already married to memorialize an agreement about what they intend to do with their finances. But what is the difference between a postnuptial agreement vs. prenuptial agreement?
As the name implies, a prenuptial agreement is made before the marriage (“pre-” signals it’s before; it can also be referred to as an "antenuptial" or “pre-marital” agreement), and a postnuptial agreement is a document that’s executed after the couple is already married. A postnuptial agreement can be made at any point during the marriage, whether a couple has been married for a single day or a decade, while a prenuptial agreement can only be made before the couple is legally married. While the timing is the most basic difference, there are also differences in the legal standards for what will be considered enforceable or unenforceable.
Twenty-eight states, including California, have adopted a law called the Uniform Pre-Marital and Marital Agreement Act (UPMAA), which lays out specific requirements that must be met by both types of marital agreements. Those requirements include:
In addition to needing to meet the requirements of the UPMAA, a post-nuptial agreement has some additional considerations. When parties are entering into a prenuptial agreement, they have no special obligation to one another yet, but in a postnuptial agreement, they are already spouses and thus already owe one another a duty of care. Postnuptial agreements are thus more closely scrutinized by the court, and must clearly demonstrate that the spouses were dealing with one another in the utmost good faith and not trying to hide assets or debts. In the prenuptial context, one spouse can always just walk away from the marriage if they truly can’t live with the terms of the proposed prenuptial agreement. In the postnuptial context, it’s much more difficult for spouses to extract themselves from that situation, particularly if one spouse is financially dependent for his or her day-to-day survival on the spouse who is looking for the post-nup. So while both types of agreements will be set aside by the court if they’re clearly involuntary or the terms are unconscionable, a postnuptial agreement has an even higher standard of fair dealing and disclosure than a prenuptial agreement does.
Whether you’re considering a postnuptial agreement vs. prenuptial agreement, we are here to help. Our experienced family lawyers at ADZ Law understand how tough these decisions are and will guide you through every step. If you’re ready to talk about your options, call 650-458-2300 to contact ADZ Law today for a confidential consultation.