Securing Your Future: A Guide to Prenuptial and Postnuptial Agreements
When it comes to protecting your assets and ensuring financial security and predictability during a divorce, a well-written prenuptial or postnuptial agreement can be beneficial. While these agreements often have a reputation for being cold or unromantic, they are becoming increasingly common and widely accepted – and not just among celebrities and ultra-high-net-worth couples. In fact, a recent study shows that nearly 50% of U.S. adults supported the use of prenups.
These agreements can not only protect your wealth in the event of a divorce but can also provide clarity, clear expectations, and perhaps peace of mind regarding your finances and financial responsibilities in the event of a divorce. We’ll explore the key differences between prenuptial and postnuptial agreements, the benefits they offer and the legal steps involved in creating an enforceable agreement.
The Difference Between Prenuptial and Postnuptial Agreements
Both prenuptial and postnuptial agreements serve the same basic purpose: to outline and provide a framework for the treatment of assets, liabilities and each side’s financial responsibilities in the event of divorce or separation. The main difference between the two agreements is their timing.
A prenuptial agreement is signed prior to marriage. It allows couples to determine in advance how their assets and liabilities will be divided if their marriage dissolves, and can also establish management of income, properties and potential alimony obligations in the event of a divorce.
A postnuptial agreement is signed after the parties are married. This can happen when one or both partners want to clarify or formalize financial agreements made between the two after they’ve already tied the knot. It can also address changes in circumstances such as a significant shift in assets or financial goals. Most commonly, in our practice, we see couples pursue a postnuptial agreement after separating (but not divorcing) or experiencing some sort of marital discord and want to enter into a formal agreement prior to reconciling the marriage.
The key benefits of having either agreement in place are:
- Protecting assets – these agreements can help safeguard personal wealth and property, ensuring that certain assets accumulated before or during the marriage are clearly defined and protected.
- Avoiding lengthy and expensive divorce proceedings – with a clear financial roadmap in place, couples may be able to minimize disputes over assets and other financial matters, leading to a smoother and more cost-effective divorce.
- Clarifying financial responsibilities – these agreements can typically establish financial obligations (or lack thereof), such as spousal support, debt division and asset distribution, ensuring both parties understand their rights and responsibilities.
- Providing security, expectations, and peace of mind – having an agreement in place means both spouses know their financial interests are protected and that there is a clear plan in place in the event the marriage dissolves.
Steps to Creating Enforceable Prenups and Postnups in Georgia
Creating a legally enforceable prenuptial or postnuptial agreement in Georgia requires careful attention to detail. To ensure the agreement holds up in court, these steps must be followed:
- Full financial disclosure – both partners must fully disclose their financial assets, liabilities and income. Failure to do so can result in the agreement being invalidated.
- Voluntary agreement – the agreement must be signed freely, without coercion, duress or fraud. If either party can prove they were pressured or forced into signing, the agreement may be unenforceable.
- No Unconscionable Terms – the agreement should not be so substantially one-sided or unfair.
- Written agreement – the agreement must be written and signed by both parties. Verbal agreements or informal understandings are not legally binding. Additionally, the agreement must be executed in the presence of two witnesses, with at least one of the witnesses being a notary.
- Independent legal counsel – while having independent legal counsel is not a requirement in Georgia, it is important and strongly recommended that each party has the opportunity to obtain their own legal representation to ensure fairness and that they both fully understand the terms.
Assets and Debts Addressed in Agreements
Prenuptial and postnuptial agreements can address a wide range of financial matters, including but not limited to:
- Real estate and property ownership
- Business interests and intellectual property
- Bank accounts, retirement funds and investments
- Debts and liabilities, such as mortgages, loans or credit card debts
- Family heirlooms
- Spousal support or alimony
It is important to note that there are also limitations to what prenuptial and postnuptial agreements can address. For instance, matters like child custody arrangements or child support obligations cannot be established and enforced as these are determined based on the child’s best interests and other factors under Georgia law, not the terms of an agreement.
Modifying or Revoking a Prenuptial Agreement with a Postnuptial Agreement
A postnuptial agreement can be used after marriage to modify or update the terms of a prenuptial agreement. If a couple’s financial situation changes, they may want to revise their original agreement to better reflect their new circumstances. However, this process again requires full financial disclosure from both parties, as well as all of the other enforceability requirements of a prenuptial agreement. In other words, any changes or revocations must adhere to the same legal requirements as the original agreement.
Whether you’re preparing for marriage or are already navigating married life, understanding the importance and benefits of prenuptial and postnuptial agreements can help secure your financial future. With the support of experienced legal counsel and a focus on full financial transparency, couples can create a fair and enforceable agreement that protects both partners’ interests. Done correctly, these agreements offer peace of mind, ensuring a balanced, trust-based approach to financial matters while safeguarding your shared future.
about the author
Sarah Kirschbaum Robertson
Associate
Sarah Kirschbaum Robertson is an associate at Boyd Collar Nolen Tuggle & Roddenbery. She advises clients on a wide range of family law matters, including high-net-worth divorces, pre- and postnuptial agreements, paternity and legitimation matters, and child custody and support disputes.