Even though they typically fall under the legal umbrella of marriage contracts, people commonly refer to these types of agreements as prenuptial and post-nuptial contracts. Couples may choose to draft a prenuptial agreement before they marry in order to highlight assets, debts, and property that are separately brought into the union. The post-nuptial version of the agreement, then, is the document that couples enter into post-marriage so they can accurately classify their changing portfolios.
Couples may create a post-nuptial marriage contract for numerous reasons. Three common reasons include:
- One spouse wants to embark on a financial venture for which the other spouse refuses to share risk
- One spouse receives a large inheritance or valuable gift they would prefer keeping separate from their spouse
- The spouses had planned on drafting a similar contract before tying the knot, but they simply ran out of time
Based on the unique financial characteristics of their relationship, couples should consider drafting and updating a marriage contract as circumstances change. From having or adopting a child or purchasing a home to starting a business or receiving a financial windfall, couples can use a post-nuptial agreement to clearly organize assets, debts, duties, and responsibilities. This document cannot take the place of negotiations that center on property division or a parenting time agreement during divorce, but it can help in providing a strong starting point for fruitful discussions.
There are numerous factors that the couple should not include in a marriage contract, whether it is drafted before or after the nuptials take place. These include:
- Conduct provisions: Many couples attempt to leverage personal wishes into their contract. These terms, often referred to as “lifestyle provisions,” may include elements such as weight gain, household chores and an intimacy schedule. It’s important to note that the inclusion of such provisions could potentially invalidate the entire agreement.
- Inducements for divorce: While couples can include certain financial factors in a post-nuptial agreement, they are cautioned to avoid including any sort of divorce inducement, reward or encouragement, as these are generally considered to be contrary to public policy. These can be tied to financial incentives or the distribution of property. Like lifestyle provisions, these, if present in a post-nuptial agreement, could potentially make the entire document enforceable.
Marital contracts are crucial documents that couples can use to clarify assets and debts before and during marriage. With the proper legal guidance, couples can craft and maintain these helpful documents for years or decades to come.