A prenuptial agreement, often shortened to prenup, is a contract created between two people before they get married. It outlines how assets and debts will be divided in the event of a divorce. While prenups are a great way to ensure financial clarity and avoid future conflict, life has a way of throwing curveballs. What if your financial situation or future plans change significantly after you tie the knot? Can you update your prenup?
The short answer is yes. While you cannot directly modify an existing prenuptial agreement once you're married, there is a legal solution: a postnuptial agreement.
Reasons for Revisiting Your Prenup
Several reasons might prompt a couple to revisit their prenuptial agreement. Here are a few common ones:
- Significant financial change. Maybe one spouse inherited a large sum of money, started a successful business, or experienced a financial windfall. The prenup might not reflect this new reality.
- Changes in future plans. Perhaps you initially planned to stay child-free, but now you have children. The prenup might need to address child support and inheritance for them.
- Wanting to start a business together. If you decide to open a business venture together after marriage, you'll want a clear agreement on ownership and profit sharing, which the prenup might not cover.
- Change in state laws. You may need to update your marital agreement if changes in the state laws impact the terms you have outlined.
- Debt accumulation. While you may have had some protections in place, you may wish to update your agreement to include even more protections from marital debt if either party has accumulated a large amount of debt.
- Retirement. As retirement can impact a person’s financial health and situation, they may wish to update their prenuptial agreement to better reflect this change in circumstances.
Understanding Postnuptial Agreements
A postnuptial agreement, or postnup for short, is essentially a prenup created after marriage. It functions as a new legal document outlining how you and your spouse will handle finances in the event of a divorce. Just like a prenup, a postnup requires full financial disclosure from both parties and independent legal counsel to ensure fairness.
Creating a Postnup
If you find your prenup no longer reflects your current situation, consider creating a postnup. Here's what the process typically entails:
- Open communication. Discuss your desire for a postnup with your spouse openly and honestly. Explain your reasons and emphasize how it strengthens your financial future together.
- Financial disclosure. Both partners need to fully disclose their financial assets and debts to ensure a fair and enforceable agreement.
- Independent legal counsel. Each spouse should consult with separate lawyers who can advise them on the implications of the postnup and ensure their rights are protected.
- Drafting and signing. Once both parties agree on the terms, a lawyer will draft the postnuptial agreement. After careful review and approval by both partners and their lawyers, the final document is signed.
By creating a postnup, you can ensure your financial future is protected and reflects your current circumstances. Remember, communication and transparency are key throughout this process.
Talk with Our Attorneys
At The Neshanian Law Firm, Inc, our team is backed by decades of collective legal experience. Should you wish to draft a pre- or postnuptial agreement, our team is here and equipped to help.
Schedule an initial consultation online or via phone at (949) 577-7935.